Previous studies document that the stock returns of bond-issuing firms significantly underperform matched peers over the three to five years following issuance. We revisit this phenomenon and show that the underperformance is the result of an omitted return factor (a "bad model problem"). Debt...

Using a large sample of initial public offerings (IPOs) from 1985-2002, we study how the compensation of the investment banks participating in an IPO affects the pricing of the offer. We show that shifting investment bank compensation toward the selling concession (away from management fees...

Previous studies document that the stock returns of bond issuing firms significantly underperform matched peers over the three to five years following issuance. We revisit this phenomenon and show that the underperformance is the result of an omitted return factor (a bad model problem). Debt...