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Stock price reaction to debt offerings: the Turkish evidence

Avcı, Süreyya Burcu and Akdoğu, Evrim and Şimşir, Şerif Aziz (2020) Stock price reaction to debt offerings: the Turkish evidence. (Accepted/In Press)

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Abstract

We investigate the valuation effects of debt issues on the issuing firms’ common stock using a sample of Turkish issuers. For the sample of non-financial firms, we find no significant wealth effects for debt issues around the announcement dates. However, market reactions are more positive when information asymmetry between firm managers and outside investors is low, agency costs are high, and when debt issues are likely to carry positive information about firms’ prospects. These results support pecking order, signaling and agency theories of capital structure. In additional tests, we find positive market reactions to debt issue announcements of financial firms.

Item Type:Article
Subjects:H Social Sciences > HG Finance > HG4001-4285 Financial management. Business finance. Corporation finance
ID Code:40440
Deposited By:Şerif Aziz Şimşir
Deposited On:20 Sep 2020 12:34
Last Modified:20 Sep 2020 12:34

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