Effects of law on corporate financing practices—international evidence from convertible bond issues |
| |
Authors: | Timo P Korkeamaki |
| |
Institution: | School of Business Administration, Gonzaga University, Spokane, WA 99258, United States |
| |
Abstract: | Firms can adjust their convertibles to be more debt-like or equity-like through several contract terms. In particular, by providing call protection, a convertible issuer can assure its convertible bondholders that it will not force them to become equity holders during the call protection period. The possibility of a forced conversion instituted by an early call should be more threatening to investors in an economy where local laws are biased against shareholders. I examine call protection terms in an international sample and find evidence consistent with the hypothesis that convertible bond design varies based on the features of local law. |
| |
Keywords: | International Law Convertible securities Call protection |
本文献已被 ScienceDirect 等数据库收录! |
|