Shareholder Wealth Effects of Private Placements of Debt Made By REITs.

This study examined both the short-run and long-run shareholder wealth effects of private placements of debt made by Real Estate Investment Trusts (REITs). The authors found that there is no significant market reaction to the placement. One-year and three-year adjusted abnormal returns were found to be negative and significant for placing REITs. This suggests that REITs do not benefit from added monitoring associated with the private placement. The results also suggest that REIT managers issue in order to grow the asset size of the firm to the detriment of shareholder wealth.

Main Author: Higgins, Eric.
Other Authors: Howton, Shawn., Howton, Shelly.
Format: Villanova Faculty Authorship
Language: English
Published: 2006
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