Showing papers in "Journal of Applied Corporate Finance in 1988"

The case for convertibles

Abstract: Bond-Equity Hybrids Let Investors Keep Their Options Open Convertible securities are the chameleons of the investment world, offering investors both the growth potential of common stocks and the income offered by bonds. Issued by companies looking to raise capital, these hybrid investments are generally structured as some form of debt (bonds, debentures) or preferred shares with an embedded option that allows conversion into common shares under predetermined conditions.

Leveraged esops and corporate restructuring

Abstract: The ESOP is treated as simply an employee benefit, but it is really a device to save the human race. —Louis T. Kelso, founder of ESOP1 The American public is not too well-informed….these plans have been heralded as the basic solution for many of our economic ills. Specifically, one of our chief proponents… has said that widespread adoption of ESOPs will accomplish the following objectives: The restoration and acceleration of economic growth to unprecedented levels; create legitimate full employment for two or three decades; and lay the foundation for arresting inflation. I must confess that these are some claims. Certainly no one since I have been chairing this committee has come before us with program that promises that much. —Sen. Hubert Humphrey, Joint Economic Committee Hearings, 1975 (Kelsonomics is) an amateurish and crankish fad. —Paul Samuelson, San Juan Star, April 27, 1972 The ESOP is first and foremost an employee benefit plan. —Rosen, Klein, Young, 1986