An examination of preferred stock and its effect on common shareholder wealth
The primary purpose of this dissertation is to investigate selected capital structure theories through the study of the effect of preferred stock issuances on the wealth of common shareholders. These theories include the tax hypothesis of Modigliani and Miller (1963), the asymmetric information hypothesis of Myers and Majluf (1984), the signalling hypotheses of Ross (1977), and the growth hypothesis of Heinkel and Zechner (1990). The secondary purpose is to examine the importance of various features of preferred stock. These features include convertibility, callability, and whether the dividend rate is fixed or adjustable. The hypotheses are tested by estimating the wealth effect of the preferred stock issue announcement on the common shareholders and separating the alternative explanations by relating the wealth effect to the characteristics of the issuer and the issue.
|Authors:||Beck, Kristine Louise|
Florida State University Libraries
|Type of publication:||Other|
Persistent link: https://www.econbiz.de/10009431394
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