論文

査読有り
2012年11月

The impact of convertible debt financing on investment timing

ECONOMIC MODELLING
  • Kyoko Yagi
  • ,
  • Ryuta Takashima

29
6
開始ページ
2407
終了ページ
2416
記述言語
英語
掲載種別
研究論文(学術雑誌)
DOI
10.1016/j.econmod.2012.06.032
出版者・発行元
ELSEVIER SCIENCE BV

We develop a model to examine the timing of investment decisions in relation to the issuance of convertible debt by firms. Our model shows that when the demand shock has higher volatility, the firm finances the investment cost with high-coupon convertible debt. We find that default occurs earlier for firms that finance with convertible debt rather than with straight debt. We also find that firms with high-growth prospection, high volatility, and low capital costs that issue convertible debt tend to defer investments. Furthermore, we examine the investment decisions in which the convertible debt includes a call provision. We show that firms that use callable convertible debt invest earlier than those that use non-callable convertible debt by using suboptimal coupon payments. The opportunity from the forced conversion increases as the volatility increases. These results are consistent with recent empirical evidence. (C) 2012 Elsevier B.V. All rights reserved.

Web of Science ® 被引用回数 : 4

リンク情報
DOI
https://doi.org/10.1016/j.econmod.2012.06.032
Web of Science
https://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcAuth=JSTA_CEL&SrcApp=J_Gate_JST&DestLinkType=FullRecord&KeyUT=WOS:000311184700034&DestApp=WOS_CPL
ID情報
  • DOI : 10.1016/j.econmod.2012.06.032
  • ISSN : 0264-9993
  • Web of Science ID : WOS:000311184700034

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