Valuation Effects of New Securities Issuance by Bank Holding Companies: New Evidence

Paul M Horvitz, Insup Lee and Kerry L Robertson

The Financial Review, 1991, vol. 26, issue 1, 91-104

Abstract: This study examines the announcement impact of bank holding company security offerings on shareholder wealth. The results from this study regarding the effects of preferred stock, convertible debt, and straight debt issuances are largely consistent with previous studies. However, in contrast to previous studies pertaining to both bank holding companies and nonfinancial firms, this study does not find statistically significant negative announcement effects of common stock issues. This particular finding is consistent with the argument that an increase in the capital ratio may have a positive impact on common stock prices of bank holding companies under certain circumstances. Copyright 1991 by MIT Press.

Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:26:y:1991:i:1:p:91-104

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