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An investigation of cost differences between public sales and private placements of debt

David W. Blackwell; David S. Kidwell
Journal of Financial Economics 1988 22(2), 253-278
We examine the cost differences between public sales and private placements of debt for a sample of public utility issues. The lowest cost method depends on a firm's transaction costs which comprise flotation costs, agency costs, and the costs of searching the market. Our findings suggest that firms minimize the cost of issuing securities by selecting the market providing the lowest transaction costs.

Plant-closing decisions and the market value of the firm

David W. Blackwell; M. Wayne Marr; Michael F. Spivey
Journal of Financial Economics 1990 26(2), 277-288
We investigate the underlying causes and the announcement effects of plant closings. The closing in our sample do not appear related to takeover activity. Instead, they appear motivated by declining firm profitability. Firms announcing closings have lower earnings than market or industry medians; earnings typically improve slightly after the announcement. We find a negative stock-market reaction to plant-closing announcements.