The effectiveness of any sanction depends on the costs of avoiding its restrictions. We examine whether bearish option strategies were substitutes for short sales during the September 2008 short-sale ban. We find a significant diminution in option volumes and a significant increase in option...

Firms have not historically called their convertible bonds as soon as they could force conversion. Various explanations for the delay rely on the size of the dividends that bondholders forgo so long as they do not convert. We investigate an important change in convertible security design, namely...

Firms have not historically called their convertible bonds as soon as they could force conversion. Various explanations for the delay rely on the size of the dividends that bondholders forgo so long as they do not convert. We investigate an important change in convertible security design, namely...

This online appendix belongs to the paper "Disappearing Call Delay and Dividend-Protected Convertible Bonds" and provides a further investigation of explanators of call delay. Internet Appendix I sets out a dividend-related signaling model that can explain a delay in calling...

Firms have not historically called their convertible bonds as soon as conversion could be forced. A number of explanations for the delay rely on the size of the dividends that bondholders forgo so long as they do not convert. We investigate an important change in convertible security design,...

We provide evidence that security design reflects the interplay of capital supplier and security issuer preferences. While call provisions have historically been the default option in convertible security design, only a minority of post-2005 issues are callable. Because hedge funds dominate the...

Sovereign bond benchmarks are important determinants of corporate bond issuance and maturity. We show that by providing benchmark rates, long-maturity government issues complement the issuance of similar-maturity corporate issues. Government and corporate bond issues are also substitutes and...

Investment characteristics and the form of external financing are linked. Factor analysis indicates that the principal determinant of the financing choice is whether an investment's payoffs can be described as a hit or miss. Hit-or-miss investments are more likely to be equity financed. Equity...

We investigate the effect of intermediary frictions on asset pricing by examining the role of intermediaries in the convertible bond market. Buy-and-hedge intermediaries distribute new convertible issues but face costs in doing so. We demonstrate that these costs affect the price of...