Convertible Bonds and Corporate Governance

• Main Authors: Shiang-Ru Huang, 黃湘茹
• Other Authors: Ruei-ShianWu
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/89937643208801745708

碩士 === 元智大學 === 商學碩士班(會計學程) === 100 === The purpose of this study is to investigate the impact of the level of shareholder rights on the conversion probability of convertibles and the impact of the level of shareholder rights on the post convertibles announcement drift for the domestic convertible debts issued by the U.S. public firms over the period from 1990 through 2008. Following Gompers et al. (2003) and Bebchuk et al. (2009), we adopt the Governance Index and the Entrenchment Index as proxies for the level of shareholder rights. Our findings suggest that convertible bondholders tend to convert their bonds to equities when managers adopt few anti-takeover provisions to prevent themselves from being replaced. Furthermore, we find that firms with more anti-takeover provisions have a lower conversion probability of convertibles, and are more likely to issue debt-like convertibles, which result in a positive announcement drift.