This paper describes and analyzes a relatively new method of equity-based restructuring, Targeted Stock. We examine announcement period share price reactions for completed, pending , and canceled offerings. Although the total number of completed transactions to date is small, we document a...

This paper describes and analyzes a relatively new method of equity-based restructuring, Targeted Stock. We examine announcement period share price reactions for completed, pending, and canceled offerings. Although the total number of completed transactions to date is small, we document a...

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.

Much of the benefit from bank loans is generated by the specialized monitoring and information gathering role provided by financial institutions, including their role in facilitating the reorganization of firms experiencing financial distress. Despite these numerous benefits, it is somewhat...

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...