CALLS OF WARRANTS - TIMING AND MARKET REACTION

• 成果类型: Note
• 署名作者: SCHULTZ, P
• 署名单位: University System of Ohio; Ohio State University; University of Iowa
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.2307/2328918
• 发表日期: 1993
• 页码: 681-696
• 关键词: VOLUNTARY CONVERSION; returns; microstructure; securities

摘要

This paper examines the timing of, and reaction to, calls of callable warrants. Three main findings emerge. First, unlike convertible bonds or preferred stock, callable warrants are called almost as soon as possible. Second, there is a negative price reaction of about 3 percent when a call is announced. Finally, at the completion of a call, the stock price rebounds by an average of 7 percent. The total reaction from announcement through completion of the call is a positive excess return of about 4 percent.