The Long-Run Performance of Firms Issuing Bonds
Journal of Fixed Income, Fall 1997
Posted: 3 May 1998
Abstract
The authors examine equity returns of firm issuing public debt between 1980 - 1990 for three years following the debt issue. Bond rating has a strong impact upon the results. Equity returns of industrial issuers of B-rated non-shelf debt significantly underperformed the CRSP market value-weighted index over this period. All other issuers had equity returns not significantly different from the market value-weighted index. Returns for the B-rated issuers are also found to be highly skewed. A small number of firms experienced phenomenal returns, while the vast majority underperformed the market.
JEL Classification: G12
Suggested Citation: Suggested Citation
Jewell, Jeffrey Jay and Livingston, Miles B., The Long-Run Performance of Firms Issuing Bonds. Journal of Fixed Income, Fall 1997, Available at SSRN: https://ssrn.com/abstract=82989
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