Equity returns of distressed equity issuers
- Authors
- Park, James L.
- Issue Date
- 8월-2015
- Publisher
- ACADEMIC PRESS INC ELSEVIER SCIENCE
- Keywords
- Distress anomaly; Equity issuance puzzle
- Citation
- FINANCE RESEARCH LETTERS, v.14, pp.93 - 103
- Indexed
- SSCI
SCOPUS
- Journal Title
- FINANCE RESEARCH LETTERS
- Volume
- 14
- Start Page
- 93
- End Page
- 103
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/92854
- DOI
- 10.1016/j.frl.2015.05.011
- ISSN
- 1544-6123
- Abstract
- Theoretical and empirical studies show a strong positive correlation between distress and equity issuance which suggests that low future returns of distressed firms (i.e., distress anomaly) could be related to the equity issuance puzzle. Upon testing this conjecture, this study finds that low returns of distressed firms are only observed in firms issuing the most equity, and this relationship is robust against alternative specifications. Testing whether distressed equity issuers have reduced exposure to common risk factors renders insignificant results. In conclusion, this study confines the distress anomaly to a subset affirms that issue the most equity. (C) 2015 Elsevier Inc. All rights reserved.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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