This thesis presents three essays on the determinants and costs of corporate security offerings. The essays contribute to an ongoing debate in the literature on what determines firms’ security choice by examining the following issues: “Does corporate governance influence convertible debt issuance?”; “The signaling content of security offerings proceeds”; and “The costs of raising capital: New evidence.”In the first essay, we explore the influence of corporate governance on firms’ choice between equity, convertible debt and straight debt. For a sample of Western European corporate security offerings between 1999 and 2010, we find that firms with weaker firm- and country-specific corporate governance are more likely to issue convertible debt. They thus use convertible debt as a substitute for corporate governance, which is confirmed by a more favorable stock price reaction to convertible debt announcements by firms with weaker corporate governance. Moreover, these results suggest that corporate governance is a significant determinant of firms’ security choice. The second essay examines the determinants and signaling content of security offering proceeds, controlling for the endogeneity of issue size. For a sample of US equity, convertible debt and straight debt offerings between 1999 and 2011, the findings show that stockholders can partly predict issue size by analyzing firms’ funding needs and financing costs. We find that stockholders use predicted issue sizes of equity and convertible offerings as signals of growth opportunities, whilst larger than predicted issue sizes signal issuer overvaluation. For straight debt issues, we find that unpredicted issue sizes have a positive impact on announcement returns, which is consistent with them serving as a signal of growth opportunities. Further analysis of firms’ actual uses of predicted and unpredicted offering proceeds confirms these interpretations. The results shed light on previous inconsistent findings on the impact of issue size on security offering announcement returns. The final essay examines the magnitude and determinants of direct issuance costs, controlling for firms self-selecting into different security classes, namely equity, convertible bonds, and straight bonds, and flotation methods, namely non-shelf, shelf and 144a. For a recent sample of US corporate security offerings between 1999 and 2011, findings show that the magnitude of direct issuance costs has decreased over the last decade. These costs are higher for equity than straight bond offerings and of intermediate magnitude for convertible bond offerings. Within each security class, costs are larger for non-shelf than 144a offerings, which again have larger direct issuance costs than shelf offerings. Finally, underwriter spreads are directly related to underwriter effort on due diligence, pricing and selling, and direct issuance costs are truncated by firms’ self-selection into particular security types.

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Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2013. / Corporations often find it difficult to raise capital in illiquid markets such as most African markets and if they do they pay a premium which is not only costly to them but also propagates illiquidity in these markets. Convertible bonds provide a cheaper source of nancing for issuers with the optionality of maintaining targeted capital structures. However, these instruments are not popular in these markets as they are less understood compared to their conventional counterparts and if used are often mispriced. The main objective of this research is to provide a valua- tion framework for structured bonds, speci cally convertible bonds where market imperfections such as illiquidity are prevalent. This will entail customising the standard valuation framework so that these market imperfections are incorporated in the model. The valuation framework of the convertible bond is then applied to an illiquid market where several deviations from the perfect-market benchmarks exist and then observe what e ect these deviations have by comparing the theo- retical value to that of a convertible bond assuming the market is liquid.

The purpose of the study is to use the data of the companies that are listed (including OTC) in Taiwan Stock Exchange to examine whether companies engage in earnings management in the years convertible bonds are issued and de-listed. We also want to know if there is any difference of earnings management whether convertible bonds are issued domestically or abroad. Discretionary current accruals are adopted as proxies for earnings management and the regression models are used to control the related variables. The empirical results indicate that companies conduct earnings management in the years convertible bonds are issued and there is no significant difference of earnings management whether convertible bonds are issued in Taiwan or abroad. However, the data after 2001 indicate that companies that issued convertible bonds abroad have less earnings management than those that issued convertible bonds domestically. The results also show no significant difference in the years convertible bonds are de-listed. The reasons may be due to the relatively small sample size or companies may not use discretionary accruals to conduct earnings management.

The objects this thesis want to study can be separated into two parts. The first part is investigating why firms choose to issue convertible bond. We use the public financial information and macroeconomics factors to establish a security choice model. In this security choice model, we can understand the motivation of issuance and investors¡¦ expectation of security type (equity-like or debt-like) which will be issued. The second part of this thesis is about convertible bond issuance announcement effect. We want to know if the public information and the pre-issuance security type expectation would affect the announcement effect. Following is the conclusions: (1) We find that less information asymmetry, less agency cost, more operating risk will lead to higher probability of equity-like security issuance. (2) Most convertible bonds issued in Taiwan are more debt-like. (3) Equity-like convertible bonds issuances have negative announcement effect. The issuances different from expectation will lead to more negative price effect, especially those debt-like firm but issue equity-like security. (4) The variables that can explain security choice may not explain the announcement price effect.

Thesis (Ph. D.)--University of Missouri-Columbia, 2001. / Typescript. Vita. Includes bibliographical references (leaves 118-124). Also available on the Internet.

Thesis (Ph. D.)--University of Missouri-Columbia, 2001. / Typescript. Vita. Includes bibliographical references (leaves 118-124). Also available on the Internet.

Loan as an instrument of funding of limited liability company formed for the purpose of business in modern technologies Abstract This thesis deals with convertible loan, as one of the tools of debt financing of a limited liability company established for the purpose of business in the field of modern technologies, usually referred to as a startup. The specific of the convertible loan agreement is in the fact that in addition to the usual right to a refund of the provided loan, the lender also has the right to acquire a share in the company provided by the loan (the startup). The aim of the work is to analyze the individual parts of the convertible loan agreement and evaluate their mutual relations and the impact on the legal status of the lender and the startup. When writing this work, the author carried out his research mostly from foreign publications that focus on convertible loans and startup financing. In his work, the author first defines the companies established for the purpose of business in the field of modern technologies and the methods of their financing. Subsequently, the thesis in detail focuses on the debt method of financing, i.e., the convertible loan agreement and its individual parts. In the first place, the credit component of the convertible loan agreement was examined, with regards to...

In this paper we dive into the world of pricing convertible bonds, with increasing complexity. This work aims to investigate the pricing methods behind different convertibles and see how well they agree with exact prices and benchmarks from established literature. The simulation-based techniques used for the European convertibles are regular Monte Carlo, and for the American with exercise opportunity before maturity, least-squares Monte Carlo with backward induction procedure. The findings in this paper do agree well with the analytical results and what previous papers have found. / Denna uppsats utforskar prissättningen av konvertibla obligationer och fördjupar sig i ökande komplexitetsnivåer. Dess mål är att undersöka olika prissättningsmetoder för olika typer av konvertibler och bedöma deras anpassning till de exakta priser och riktmärken från befintlig litteratur. De Europeiska konvertiblerna prissätts med ett simuleringsbaserat tillvägagångssätt, nämligen med vanlig Monte Carlo, medan de Amerikanska konvertiblerna, som erbjuder möjlighet att konvertera före förfallodagen, prissätts med minsta kvadratmetoden och Monte Carlo med en bakåtinduktionsprocedur. Resultaten som erhållits i denna studie visar en stark överensstämmelse med analytiska resultat och resultaten från tidigare forskningsartiklar.

Order in design, whether in music or a building comes from bringing together parts to make a whole. These parts can have an autonomous existence separately and combine to formulate a different event collectively. This thesis is a study of how a building accommodates to the changing needs of a diverse community. It does this by investigating to what end two neighboring apartments, one small and one medium-sized could combine to develop into one large apartment, and revert back again to two apartments when the needs of the inhabitants change. This concept could be paralleled to Jazz, where the musicians find means of altering the sound of the music through improvisation between the notes of the song. The structure of the building like the notes of the melody provides the stationary component and forms the rhythmic beat between the apartments. The pauses or gaps between the structure provide the opportunity for flexibility and improvisation. The melody of the construction comes from the integration of the repetitious permanent structural elements, semipermanent conditions and spontaneously alterable parts. The orchestration of these components allows the building to transform and experience an altering production of its own. / Master of Architecture