This paper is a study on how U.S stock market reacts on sovereign credit rating announcements, and if there is a significant difference between low or high debt firms. We have used an event study based on historical stock prices from 30 companies, 15 with high debt and 15 with low debt. All companies are taken from the S&P`s 500 index which we also use as a market index. We use a regression model with 10 % significance level to see if there is a significant impact on high debt firms. Our result shows that the market will be affected by the downgrade. We also conclude that there was a significant negative impact on the high debt firms.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hh-18959 |
| Date | January 2012 |
| Creators | Berglund, Axel, Fransson, Carl |
| Publisher | Högskolan i Halmstad, Sektionen för hälsa och samhälle (HOS), Högskolan i Halmstad, Sektionen för hälsa och samhälle (HOS) |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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