{"id":{"repo_id":"vt","oai_identifier":"oai:vtechworks.lib.vt.edu:10919/30327"},"canonical_url":"https://search.dev.ndltd.org/etd/vt/oai:vtechworks.lib.vt.edu:10919/30327","repository":{"repo_id":"vt","name":"Virginia Tech","base_url":"https://vtechworks.lib.vt.edu/oai/request"},"display":{"title":"Two Essays on Convertible Debt","abstract":"This dissertation examines two different topics related to the issuance of a convertible debt security. The first essay addresses the question of how managers set the equity value in a convertible debt issue. A convertible debt security has value derived from an equity component and a debt component. As a result, managers must decide how much of the convertible debt's value will be derived from equity at issuance. I examine three hypotheses in addressing this question. Empirical evidence is provided supporting the assertion that managers issue more equity-like debt when the firm will have lower future operating performance and a greater potential for underinvestment. Empirical support is not found for managers take into consideration asset substitution concerns when setting the equity value in a convertible debt issue. The second essay examines why are abnormal returns negative for the equity during the convertible debt's issuance period. This has been documented by Dann and Mikkelson (1984), Mikkelson and Partch (1986, 1988), and also by this dissertation. I furnish evidence that is consistent with a bid-ask spread bias not causing the negative equity abnormal returns during the issuance period of a convertible debt security. Tests are also performed that provide results that are consistent with the issue period returns being partially due to a resolution of uncertainty.","abstract_html":"This dissertation examines two different topics related to the issuance of a convertible debt security. The first essay addresses the question of how managers set the equity value in a convertible debt issue. A convertible debt security has value derived from an equity component and a debt component. As a result, managers must decide how much of the convertible debt's value will be derived from equity at issuance. I examine three hypotheses in addressing this question. Empirical evidence is provided supporting the assertion that managers issue more equity-like debt when the firm will have lower future operating performance and a greater potential for underinvestment. Empirical support is not found for managers take into consideration asset substitution concerns when setting the equity value in a convertible debt issue. The second essay examines why are abnormal returns negative for the equity during the convertible debt's issuance period. This has been documented by Dann and Mikkelson (1984), Mikkelson and Partch (1986, 1988), and also by this dissertation. I furnish evidence that is consistent with a bid-ask spread bias not causing the negative equity abnormal returns during the issuance period of a convertible debt security. Tests are also performed that provide results that are consistent with the issue period returns being partially due to a resolution of uncertainty.","abstract_has_math":false,"creators":["Bremser, Albert W."],"institution":"Virginia Tech","degree_name":"Ph. D.","degree_level":"doctoral","degree_discipline":"Accounting and Information Systems","degree_department":"Accounting and Information Systems","school":null,"contributors":[],"advisors":[],"committee_chairs":["Keown, Arthur J."],"committee_members":["Billingsley, Randall S.","Easterwood, John C.","Kumar, Raman","Shome, Dilip K."],"year":1997,"date_issued":"1997-03-25","date_published":"1997-03-25","updated_at":"2026-07-22T22:18:58Z","subjects":["security","convertible debt","equity"],"languages":[],"rights":["In Copyright"],"rights_urls":["http://rightsstatements.org/vocab/InC/1.0/"],"identifier_entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["etd-192016312971890"],"render_values":[{"text":"etd-192016312971890","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/10919/30327","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.committeechair","label":"Committee Chair","values":["Keown, Arthur J."]},{"key":"dc:contributor.committeemember","label":"Committee Member","values":["Billingsley, Randall S.","Easterwood, John C.","Kumar, Raman","Shome, Dilip K."]},{"key":"dc:contributor.department","label":"Department","values":["Accounting and Information Systems"]},{"key":"dc:creator","label":"Author","values":["Bremser, Albert W."]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.accessioned","label":"Dc Date Accessioned","values":["2014-03-14T20:21:24Z"]},{"key":"dc:date.available","label":"Dc Date Available","values":["2014-03-14T20:21:24Z","1998-03-25"]},{"key":"dc:date.issued","label":"Date","values":["1997-03-25"]},{"key":"dc:publisher","label":"Institution","values":["Virginia Tech"]},{"key":"dc:type","label":"Dc Type","values":["Dissertation"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Accounting and Information Systems"]},{"key":"thesis:degree_level","label":"Degree Level","values":["doctoral"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph. D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["Virginia Polytechnic Institute and State University"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["security","convertible debt","equity"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:rights","label":"Dc Rights","values":["In Copyright"]},{"key":"dc:rights.uri","label":"Rights URI","values":["http://rightsstatements.org/vocab/InC/1.0/"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["etd-192016312971890"]},{"key":"dc:identifier.uri","label":"Identifier URI","values":["http://hdl.handle.net/10919/30327"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["This dissertation examines two different topics related to the issuance of a convertible debt security. The first essay addresses the question of how managers set the equity value in a convertible debt issue. A convertible debt security has value derived from an equity component and a debt component. As a result, managers must decide how much of the convertible debt's value will be derived from equity at issuance. I examine three hypotheses in addressing this question. Empirical evidence is provided supporting the assertion that managers issue more equity-like debt when the firm will have lower future operating performance and a greater potential for underinvestment. Empirical support is not found for managers take into consideration asset substitution concerns when setting the equity value in a convertible debt issue. The second essay examines why are abnormal returns negative for the equity during the convertible debt's issuance period. This has been documented by Dann and Mikkelson (1984), Mikkelson and Partch (1986, 1988), and also by this dissertation. I furnish evidence that is consistent with a bid-ask spread bias not causing the negative equity abnormal returns during the issuance period of a convertible debt security. Tests are also performed that provide results that are consistent with the issue period returns being partially due to a resolution of uncertainty."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["Ph. D."]},{"key":"dc:title","label":"Title","values":["Two Essays on Convertible Debt"]}]}],"canonical_facts":{"dc:contributor.committeechair":["Keown, Arthur J."],"dc:contributor.committeemember":["Billingsley, Randall S.","Easterwood, John C.","Kumar, Raman","Shome, Dilip K."],"dc:contributor.department":["Accounting and Information Systems"],"dc:creator":["Bremser, Albert W."],"dc:date.accessioned":["2014-03-14T20:21:24Z"],"dc:date.available":["2014-03-14T20:21:24Z","1998-03-25"],"dc:date.issued":["1997-03-25"],"dc:description.abstract":["This dissertation examines two different topics related to the issuance of a convertible debt security. The first essay addresses the question of how managers set the equity value in a convertible debt issue. A convertible debt security has value derived from an equity component and a debt component. As a result, managers must decide how much of the convertible debt's value will be derived from equity at issuance. I examine three hypotheses in addressing this question. Empirical evidence is provided supporting the assertion that managers issue more equity-like debt when the firm will have lower future operating performance and a greater potential for underinvestment. Empirical support is not found for managers take into consideration asset substitution concerns when setting the equity value in a convertible debt issue. The second essay examines why are abnormal returns negative for the equity during the convertible debt's issuance period. This has been documented by Dann and Mikkelson (1984), Mikkelson and Partch (1986, 1988), and also by this dissertation. I furnish evidence that is consistent with a bid-ask spread bias not causing the negative equity abnormal returns during the issuance period of a convertible debt security. Tests are also performed that provide results that are consistent with the issue period returns being partially due to a resolution of uncertainty."],"dc:description.degree":["Ph. D."],"dc:identifier.other":["etd-192016312971890"],"dc:identifier.uri":["http://hdl.handle.net/10919/30327"],"dc:publisher":["Virginia Tech"],"dc:rights":["In Copyright"],"dc:rights.uri":["http://rightsstatements.org/vocab/InC/1.0/"],"dc:subject":["security","convertible debt","equity"],"dc:title":["Two Essays on Convertible Debt"],"dc:type":["Dissertation"],"thesis:degree_discipline":["Accounting and Information Systems"],"thesis:degree_level":["doctoral"],"thesis:degree_name":["Ph. D."],"thesis:institution_name":["Virginia Polytechnic Institute and State University"]},"updated_at":"2026-07-22T22:18:58Z"}