The first hypothesis is important because it shows whether there is a difference in behavior in relation to the level of EM between debenture issuing companies and non-issuing ones.
Given that debenture issuing companies could have incentives to increase their level of earnings management in the issuing period, hypothesis 2 aimed to verify which stage this increase would occur in.
H2: Debenture issuing companies exhibit a greater level of positive earnings management at the time preceding the issue, compared with non-issuing ones.
Considering that debenture issuing companies may exhibit a greater level of EM in one of the issue phases, hypothesis 3 aimed to identify which company characteristic variables (size, sales growth, ROA, leverage) could explain this greater level of EM.
H3: Debenture issuing companies exhibit different financial and operational characteristics at the time preceding the issue, compared to non-issuing ones.
Proponents auctions frequently charge that in traditional IPOs, issuing companies
are routinely shortchanged the money from the initial pop, assuming that all the offering shares would have been bought at this higher price using the Dutch auction method.
Krungthai Card PCL, anticipates that its credit card customer base will increase 33 percent during 2004, in spite of increasingly intense competition among issuing companies
. Competition will lead Thais to demand improved card-member services this year.
In addition, GDR issuance can be a prelude to the solicitation of foreign capital, notably Chinese capital, as the issuing companies
can issue new shares for GDR buyers to convert their GDRs into stocks directly upon the maturity of GDRs.
Visa's service checks credit card numbers and expiration dates as well as the passwords card issuing companies
It would require them to strictly assess risks to shareholdings, based on such criteria as the creditworthiness of issuing companies
and expected price fluctuations, and to set aside enough reserves to cover such risks.
The DIC would then resell the shares to their issuing companies
as treasury stocks, while keeping the remaining shares for resale in the market at a later date.
About 90% of these bonds have yet to be converted into stock due to sagging stock prices, making it necessary for issuing companies
to raise funds to redeem them, Nikko Research said in a report.