Corporate earnings and financings: an empirical analysis

Article Abstract:

The long-term behavior of corporate earnings was examined in relation to sales of common stock, convertible bonds, and straight bonds. The sample, taken from the Securities and Exchange Commission's Registered Offerings Statistics tape, consisted of the three main corporate offerings between Jan 1975 and Dec 1982. The results indicated that industrial companies supplemented significant earnings declines by raising capital in the primary markets, and there was a significant positive correlation between the severity of the firms' earnings declines and the amount of capital that was raised.

Research, Profits, Capital formation, Corporate profits

---

The value of corporate debt with a sinking-fund provision

Article Abstract:

Sinking fund provisions are frequently issued in connection with corporate debt issuances; the sinking fund allows the corporation to retire certain portions of the debt, prior to maturity, by the use of calls at specific prices or purchases on the market. An analysis of such sinking fund provisions compares the financial instrument to the underlying firm's risk, the initial and the mature yields of the security issued, and the rate of redemption for the fund. Situations in which a sinking fund would have no value are described.

Usage, National debt, Public debts, Sinking-funds, Sinking funds

---

Tax clienteles and optimal capital structure under uncertainty

Article Abstract:

The disparity in investors' tax rates suggests that investors price bonds differently at the margin. Investors in lower tax brackets hold high-risk bonds because the bonds produce more taxable income as a result of asymmetric personal taxes. Companies can increase their value by selecting a capital structure that will appeal to a particular type of bondholder clientele. A two-period model demonstrates that a bond trading at a discount should be valued at a higher implicit tax rate than a bond trading at a premium.

Taxation, Securities, Capital, Securities taxes, Bondholders

Similar abstracts:

• Abstracts: Interstate banking and small business finance: implications from available evidence. Can your small company acquire resources as favorably as the large company?
• Abstracts: Perceived causes of success in small business. The human resource factor in small business decision making. Impact of counseling on small business performance

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.