An Analysis of Preferred Equity Redemption Cumulative Stock

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Description

This dissertation examines whether Percs, Preferred Equity Redemption Cumulative Stocks, are properly priced regarding to the relevant securities, such as the underlying common stock, the long-term call option of the stock, and so on. Test results indicate that Percs were overpriced with respect to the equivalent packages composed of the relevant securities. Further tests on arbitrage restrictions show that transaction costs would prevent arbitrage profits. This dissertation also examines the market reactions to Percs offerings. Test results reveal that the market reactions to the announcement of Percs offering and the actual issuance are both significantly negative. Compared to the market ... continued below

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viii, 119 leaves : ill.

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Pu, Hansong May 1994.

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This dissertation is part of the collection entitled: UNT Theses and Dissertations and was provided by UNT Libraries to Digital Library, a digital repository hosted by the UNT Libraries. It has been viewed 97 times . More information about this dissertation can be viewed below.

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  • Pu, Hansong

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Description

This dissertation examines whether Percs, Preferred Equity Redemption Cumulative Stocks, are properly priced regarding to the relevant securities, such as the underlying common stock, the long-term call option of the stock, and so on. Test results indicate that Percs were overpriced with respect to the equivalent packages composed of the relevant securities. Further tests on arbitrage restrictions show that transaction costs would prevent arbitrage profits. This dissertation also examines the market reactions to Percs offerings. Test results reveal that the market reactions to the announcement of Percs offering and the actual issuance are both significantly negative. Compared to the market reaction on common stock offering announcement, the market reaction on Percs offering announcement is weaker. The overpricing of Percs and the weaker reaction of the market suggest that Percs may have advantages in transaction costs, taxes and some corporate finance issues.

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viii, 119 leaves : ill.

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UNT Theses and Dissertations

Theses and dissertations represent a wealth of scholarly and artistic content created by masters and doctoral students in the degree-seeking process. Some ETDs in this collection are restricted to use by the UNT community.

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  • May 1994

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  • March 24, 2014, 8:07 p.m.

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  • Dec. 22, 2014, 9:39 a.m.

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Citations, Rights, Re-Use

Pu, Hansong. An Analysis of Preferred Equity Redemption Cumulative Stock, dissertation, May 1994; Denton, Texas. (digital.library.unt.edu/ark:/67531/metadc277588/: accessed December 15, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; .