出版社：Richards College of Business, University of West Georgia
摘要：Studied in this paper is the impact of information asymmetry, agency conflicts, flotation costs, and financial distress costs on the choice between private and public placements of convertible bond issues. In it its author finds that the level of information asymmetry between insiders and outside investors is the most important factor in the placement decision. This finding is consistent with the argument that private offering investors are better informed about the firm and certify firm quality. Firms susceptible to high agency costs due to riskshifting, underinvestment, and free cash flow problems also prefer private placements for convertible bonds. However, the economic impact of agency costs on the placement choice is lower than that of information asymmetry. Also found is that, possibly due to the lower fixed issue costs of these placements, firms with smaller issues prefer private offerings. Expected financial distress costs do not affect the placement decision of convertible bond issuers.
