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Convertible call policies

Aharon R. Ofer; Ashok Natarajan
Journal of Financial Economics 1987 19(1), 91-108
This paper tests an information-signaling hypothesis as a potential explanation for corporate convertible bond call policies and for the negative share price reaction to the announcement of the calls. We test this hypothesis by trying to ascertain whether the information signaled is realized. Our results show an unexpected decline in the firm's performance subsequent to the call. We also find significant negative cumulative returns during a sixty-month period following the calls.

The information content of equity-for-debt swaps

Ronen Israel; Aharon R. Ofer; Daniel R. Siegel
Journal of Financial Economics 1989 25(2), 349-370 open access
We demonstrate that analysts revise their forecasts of net operating income downward following the announcement of an equity-for-debt swap. Their revisions are positively correlated with the size of the stock-price reaction to the swap announcement. This evidence supports the hypothesis that announcements of equity-for-debt swaps convey information about the expected level of cash flows of the firm. We also provide evidence that this information is about transitory changes in the expected cash flows.

Seasonalities in security returns

V. V. Chari; Ravi Jagannathan; Aharon R. Ofer
Journal of Financial Economics 1988 21(1), 101-121
We document a seasonal pattern in stock returns around quarterly earnings announcement dates: small firms show large positive abnormal returns and a sizable increase in the variability of returns around these dates. Only part of the large abnormal returns can be accounted for by the tendency of firms with good news to announce early. Large firms show no abnormal returns around announcement dates and a much smaller increase in variability.