publication . Article . 2011

LONG-RUN OPERATING PERFORMANCE OF PREFERRED STOCK ISSUERS

Devrim Yaman;
Open Access
  • Published: 01 Jan 2011 Journal: The International Journal of Business and Finance Research, volume 5, issue 2, pages 61-73
Abstract
In this paper, we study the long-run operating performance of preferred stock issuers. We use three different measures of operating performance; pre-tax cash flows, profit margin and return on assets. We study the performance of industrial firms, financial firms, and utilities separately, as well as the performance of the whole sample. Our results indicate that the operating performance of preferred stock issuers as a whole declines in the three-years before the issue. We find that profitability continues to decline after the issue. This finding is consistent with earlier findings on bond and common stock issuers. We also find that the decline in profitability i...
Subjects
free text keywords: Preferred stock; long-run performance; operating performance, jel:G30, jel:G32
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