Claims ultimately awarded to shareholders of firms in reorganization were examined for a sample of thirty filings under the 1978 Bankruptcy Reform Act. The authors measured the amount paid to shareholders in excess of that which they would have received under the absolute priority rule and found...

Negative stock price reactions to conversion-forcing calls of convertible bonds and preferred stocks are reexamined and most of the sample firms are shown to exhibit full price recovery by the end of the conversion period. In addition, analysts' earnings forecasts, both short-term and long-term,...

Firms' announcements to call in-the-money convertible securities for redemption essentially force their conversion into common stock, and such announcements are generally met with significant reductions in the calling firms' equity values. An explanation based on liquidity costs is advanced and...

Common stock price reactions to announcements of sixty-seven calls of the in-the-money convertible preferred stocks are examined, and a significant average abnormal return of -1.6 percent is documented. The finding is robust to the choice of estimation period and the assumed return-generating...