It has been a puzzle why foreign firms obtain credit ratings by global rating agencies such as S&P or Moody's rather than from their home country's rating agencies even though the global raters typically assign lower credit ratings when these foreign firms issue bonds in their home currencies....

We test the biasedness of unsolicited ratings relative to solicited ratings using the ex post firm performance measured by the long-run stock performance of firms following rating announcements and changes. We find that the announcements of new unsolicited ratings are followed by negative...

The SEC’s NRSRO designation for Japanese credit rating agencies is suitable for examining certification and monitoring effects, as Japanese domestic bond markets are not subject to SEC regulations. We find that the certification increased the market share of new NRSROs (R&I and JCR) compared...

Unsolicited ratings are credit ratings of firms that have not requested rating evaluation and therefore do not pay fees. Accordingly, unsolicited ratings are issued solely by the discretion of rating agencies based on public information. Given the controversy surrounding unsolicited ratings...

We examine seasoned offerings of common stock and stock-warrant units to test predictions of recent theories of security issuance based on sequential financing and information signaling. We specify and test a simultaneous equations model involving the choice of shares versus stock-warrant units...

We provide evidence directly linking spinoff announcement returns to the pre-spinoff conduct of internal capital markets. Firms' internal capital markets may enhance value by channeling capital to divisions with superior investment opportunities (high Tobin's q), and/or by starving divisions...

We appeal to the literature on optimal timing of capital investment to identify a metric that permits a new test of the sequential financing motive for financing with convertible securities. We argue that firms that should execute capital investment with little delay should design convertibles...