Purpose: This study aims to explore the effect of financial constraints on earnings management by focusing on firms that issue redeemable convertible preferred stocks (RCPS). RCPS are considered a financing option primarily used by firms that have investment opportunities but face difficulties...

Purpose: The issuance of redeemable convertible preferred stock (RCPS) has been steadily increasing in Korea since the revision of the Commercial Act, which allows firms to issue various types of stocks, in 2010. This study aims to verify equity financing behavior by examining the...

The debate over whether dual class of shares increases or decreases share value, should be prohibited or not, should be subjected to mandatory sunset provisions, and so on has been heating up over the last few years. This paper reviews the pros and cons of dual class of shares in light of more...

Purpose The purpose of this paper is to analyze the different features of preference shares from accounting and Sharīʿah perspectives. It also aims to study Sharīʿah issues arising from preference shares and to subsequently propose solutions for identified issues that will help in...

Preferred stock has always posed something of a puzzle. Straddling the line between debt and equity, preferred stock has long existed in a shadowland between the realms of contract law on the one hand, and corporate law on the other. Depending on the situation, preferred stockholders have...

The long, gradual decline in bond yields that started in the mid-1980s has culminated in an environment of very low interest rates. This has motivated many investors to seek assets that provide higher income. The high dividend payments offered by preferred stocks have naturally attracted the...

This article uses a contingent-claims method to investigate how the provision of antidilution clause combined with the issuance of convertible preferred stock affect the entrepreneur's incentive to exert efforts to improve the prospects of the operation of an investment project. For plausible...

We study the government equity infusions and the incentives of banks to participate in the Capital Purchase Program (CPP) of the Troubled Asset Relief Program (TARP). We show that strong banks opted out of participating in CPP and that equity infusions were provided to banks that posed systemic...

The October 14, 2008 TARP program mandated a forced issuance of TARP preferred stock by the largest U.S. banks. Soon after, many smaller banks were not forced but chose to issue TARP preferred stock after being approved for issuance. We investigate the impact of TARP preferred issuance upon...