The effect of issue background and financial activities before issuance on preferred stock

• Main Authors: Lee, Ching-Han, 李京翰
• Other Authors: Lin, Jane-Raung
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/40748248982198679455

碩士 === 國立交通大學 === 財務金融研究所 === 98 === Preferred stocks are viewed as hybrid securities between common equities and debts. But there are few literatures researching about preferred stock. This paper tries to find the difference in the cost of issuing preferred stock and long-term performance after preferred stock issuance under different situation. We class different preferred stock by four directions. That are, the financial activities before preferred stock issuance, the type of preferred stock, where the issuer’s share be traded, and the credit rating of issuer. We find that all the four kinds of classification have some influence on issue cost or long-term performance. The issuer which ever operated external financing one year before the preferred stock issuance will usually have higher issue cost and better long-term performance. This effective are most when the issuer issued debt one year before issuance. But the influence on external financing one year before issuance is not always the same. That will be difference under different type of preferred stock and different issuers’ credit rating. We have a reverse result about issue cost on the sub-sample created by cumulative preferred stocks. And the effect of external financing one year before issuance will be stronger and clearer when we use the sub-sample created by the investment level issuers.