We use an empirical methodology known as path analysis to study the interrelationships in the premarket, issue date, and aftermarket underwriting activities of investment banks, as well as the impact of such activities on short-run and long-run investor returns in initial public offerings...

This article examines the interaction between underwriter reputation and market activities during the initial public offering (IPO) process. Underwriter reputation is a significant determinant of premarket underwriter activities, weakly related to aftermarket price stabilization activities, and...

Firms have two motivations for issuing convertible debt. Some issue convertible debt instead of straight debt to mitigate the costs of bondholder/stockholder agency conflicts. Others issue convertible debt instead of common debt to reduce the costs of adverse selection.

There are now two dominant theories of convertible debt held by academic economists. One theory which has been called the "risk-shifting" hypothesis-effectively views convertibles as an alternative to straight debt. The second-known as the "sig-nalling" (or "backdoor-equity") theory-treats...