Open AccessAnnouncements Effect of Corporate Bond Issuance and Its Determinants
Author(s) -
Sze Kim Chin,
Nur Adiana Hiau Abdullah
Publication year - 2013
Publication title -
contemporary economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.229
H-Index - 14
eISSN - 2300-8814
pISSN - 2084-0845
DOI - 10.5709/ce.1897-9254.70
Subject(s) - corporate bond , business , bond , financial system , finance
This study aims to investigate the effect of bond issuance announcements and to determine the company characteristics that could influence this effect.The findings reveal positive cumulative average abnormal returns following bond issuances, indicating that the market considers bond offers to be favorable news. Nevertheless, cross-sectional regression analysis shows an insignificant relation of company profitability, growth opportunities, asset tangibility, size, and managerial ownership with cumulative abnormal returns.The results confirm that there is a signaling effect of bond issuance announcements and that this effect is not affected by company characteristics