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Journal of Financial Economics Vol. 22 No. 2 1988

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

David W. Blackwell1,2; David S. Kidwell1,2

1 University of Connecticut · 2 University of Georgia

Abstract

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.

DOI
10.1016/0304-405x(88)90071-2
Volume
22
Issue
2
Pages
253-278
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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