TY - JOUR
T1 - The determinants of the hybrid security issuance decision for Australian firms
AU - Suchard, Jo Ann
AU - Singh, Manohar
N1 - Copyright:
Copyright 2006 Elsevier B.V., All rights reserved.
PY - 2006/6
Y1 - 2006/6
N2 - The Australian capital market has number of distinct characteristics that distinguish it from typical U.S. and European markets. There is a limited listed debt market where most firms use bank debt, convertible debt is not callable and stand alone warrants are used to raise capital. This paper examines the determinants of security choice for hybrid issuers in the Australian market. The results support the pecking order model and the impact of financial distress costs and taxation. Alternatively, the results provide support for the sequential financing model where firms with high profitability use convertible debt and firms with low profitability use warrants, to solve the sequential financing problem.
AB - The Australian capital market has number of distinct characteristics that distinguish it from typical U.S. and European markets. There is a limited listed debt market where most firms use bank debt, convertible debt is not callable and stand alone warrants are used to raise capital. This paper examines the determinants of security choice for hybrid issuers in the Australian market. The results support the pecking order model and the impact of financial distress costs and taxation. Alternatively, the results provide support for the sequential financing model where firms with high profitability use convertible debt and firms with low profitability use warrants, to solve the sequential financing problem.
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U2 - 10.1016/j.pacfin.2005.10.004
DO - 10.1016/j.pacfin.2005.10.004
M3 - Article
AN - SCOPUS:33744815356
SN - 0927-538X
VL - 14
SP - 269
EP - 290
JO - Pacific Basin Finance Journal
JF - Pacific Basin Finance Journal
IS - 3
ER -