Managerial Finance: Volume 15 Issue 3

THE COST OF HIGH‐YIELD BOND FINANCING

Ramesh P. Rao, David A. Lindsley, Christopher K. Ma

In this paper, we present a model to determine the interest cost of high‐yield (HY) bond financing. We first denmonstrate that, with a relatively high coupon rate, HY bonds have a…

THE EFFECTIVE YIELD TEST, THE MARKET PARITY TEST, AND EARNINGS PER SHARE

Horng‐Ching Kuo

This study shows that the classification of convertible bonds as common stock equivalents for computing primary earnings per share made by the effective yield test does not…

CORPORATE FINANCING OFFOREIGN‐BASED FIRMS: A TEST OF THE INFORMATION ASYMMETRY HYPOTHESIS

Christopher K. Ma, Ramesh P. Rao, G. Wenchi Wong

In the last decade, involvement of foreign‐based firms in the United States through setting up of joint ventures and subsidiary operations has increased tremendously. Many of…

A REVIEW OF BOND DURATION MEASURE IN FINANCIAL MANAGEMENT

Mukund S. Kulkarni

The last two decades were characterised by uncertainty in financial markets due to volatile interest rates. Consequently bond and money managers were interested in minimising…

MARKET IMPERFECTIONS AND THE COST OF CAPITAL

K.C. Chen, Manuchehr Shahrokhi

This paper has demonstrated the impacts of default risk, personal taxes, leverage‐related costs, and the limited liability of security‐holders on the systematic risk of equity…