Showing papers by "Alexander W. Butler published in 2003"
TL;DR: In this article, the authors identify the papers that were most highly cited by top-level finance journals during the 1990s, and use the most influential papers to construct suggested doctoral course reading lists in five finance research areas.
Abstract: We list the papers that were most highly cited by top -level finance journals during the 1990s. We identify the top papers overall, the most frequently cited paper published in each of the past thirty years, and the most frequently cited papers published by journal. We use the most influential papers to construct suggested doctoral course reading lists in five finance research areas. We use a comprehensive sample of journals, an extensive time period, and a new ranking method that avoids problems inherent in the existing literature.
45 citations
TL;DR: This article showed that the share of equity in total new issues does not provide real-time predictive power for forecasting market returns and that even the in-sample predictive power of S appears to stem from aggregate pseudo market timing as in Schultz (2003) and not from any abnormal ability of managers to time the equity markets.
Abstract: Previous studies have found that the share of equity in total new issues (S) is negatively correlated with future equity market returns (in-sample). Researchers have interpreted this finding as evidence that managers are able to predict the systematic component of their stock returns and to issue equity when the market is overvalued. In this paper we show that after controlling for "look-ahead bias", S does not provide real-time predictive power for forecasting market returns. Further, we show that even the in-sample predictive power of S appears to stem from aggregate pseudo market timing as in Schultz (2003) and not from any abnormal ability of managers to time the equity markets.
23 citations
TL;DR: In this paper, the authors present empirical evidence that stock market liquidity is an important determinant of the cost of raising external capital and that investment banks should charge lower fees to firms with more liquid securities.
Abstract: This paper presents empirical evidence that stock market liquidity is an important determinant of the cost of raising external capital. Because the role of an investment banking syndicate in a public security offering is analogous to that of a block trader, investment banks should charge lower fees to firms with more liquid securities. Using a large sample of seasoned equity offerings, we find that, ceteris paribus, investment banks' fees are significantly lower for firms with more liquid stock. We estimate that the difference in the investment banking fee for firms in the most liquid quintile versus the least liquid quintile, controlling for other factors, is approximately 107 basis points, which represents about 22.3 percent of the average investment banking fee in our sample. Our findings suggest that firms have an incentive to promote the market liquidity of their equity.
17 citations
TL;DR: In this article, the authors find that convertible bonds are, on average, not called later than optimal for those bonds without binding call protection, and the average (median) excess call premium is only 2.65% (1.71%), which is statistically indistinguishable from zero and substantially less than the 26%-44% call premium found by previous researchers.
Abstract: The notice period given to convertible bondholders affects the optimal call policy for convertible bonds. After accounting for the notice period, convertible bonds in our sample would have been optimally called when the stock was at about an 11% premium (median) relative to the conversion price. We find that convertible bonds are, on average, not called later than optimal. The average (median) excess call premium is only 2.65% (1.71%) for those bonds without binding call protection. These values are statistically indistinguishable from zero and are substantially less than the 26%-44% call premium found by previous researchers.
10 citations