Publication Type
Master Thesis
Version
publishedVersion
Publication Date
2010
Abstract
To examine the importance of corporate governance, I look at how management and investors behave in the event of seasoned bond offerings, controlling for the corporate governance structure of issuing firms. I find that companies with the weakest governance structure aggressively manipulate their earnings upwards during the two years prior to the debt issuances. And when the bond offerings are announced to the market, these same firms experienced positive abnormal returns over a three day event period, indicating that investors of poorly governed firms value a debt financing for the alleged decrease in agency cost.
Keywords
corporate governance, earnings management, seasoned bond offerings
Degree Awarded
MSc in Finance
Discipline
Business Law, Public Responsibility, and Ethics | Corporate Finance
Supervisor(s)
GOH, Jeremy
Publisher
Singapore Management University
City or Country
Singapore
Citation
WANG, Fang.
Why does Corporate Governance Matter? Evidence from Seasoned Bond Offerings. (2010).
Available at: https://ink.library.smu.edu.sg/etd_coll/55
Copyright Owner and License
Author
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.