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Part V Incentives, Information, and Corporate Control

Part V Incentives, Information, and Corporate Control. Chapter 19 The Information Conveyed by Financial Decisions. Exhibit 19.1: Conflicting Incentives That Motivate Management. (Row 2-1). Exhibit 19.2: Average Daily Returns on Dividend Announcement Days, 1979-84.

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Part V Incentives, Information, and Corporate Control

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  1. Part V Incentives, Information, and Corporate Control

  2. Chapter 19 The Information Conveyed by Financial Decisions

  3. Exhibit 19.1: Conflicting Incentives That Motivate Management

  4. (Row 2-1) Exhibit 19.2: Average Daily Returns on Dividend Announcement Days, 1979-84 a Statistically different from zero. Source: Lang and Litzenburger (1989)

  5. Exhibit 19.3: Signaling Theories and Their Implications a See Leland and Pyle (1997) and Myers and majluf (1984). bSee Miller and rock (1985). cSee Ross (1977)

  6. Exhibit 19.4: Stock Market Response to Pure Capital Structure Changes Note: Exhibits 18.4 and 18.5 are slightly altered versions of tables reported in Smith (1986).Sources:aMasulis (1980).bMasulis (1983). These returns include announcement days of both the original offer and, for about 40 percent of the sample, a second announcement of specific terms of the exchange.cMcConnell and Schlarbaum (1981).dDietrich (1984).eMikkelson (1981).fEckbo (1986) and Mikkelson and Partch (1986).

  7. Two-Day Announcemnt Period Return Average Sample Size Type of Announcement 216 424 102 30 221 80 Security Sales Common stock (industrial issuers)a Common stock (utility issuers)a Preferred stockb Convertible preferredc Straight debtd Convertible debtd -3.1 -1.4 0.1o 1.4o -0.2 -2.1 Exhibit 19.5: Stock Price Reactions to Security Sales Sources:aThese figures are based on calculations by Eckbo and Masulis (1995), see also Asquith and Mullins (1986). Masulis and Korwar (1986), Mikkelson and Partch (1986), Schipper and Smith (1986), and Pettway and Radcliff (1985).bLinn and Pinegar (1988) and Mikkelson and Partch (1986).cLinn and Pinegar (1988).dDann and Mikkelson (1984). Eckbo (1986), and Mikkelson and Partch (1986).oInterpreted by the authors as insignificantly different from zero.

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