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Real earnings management activities prior to bond issuance
Surendranath, Jory
Thanh, go
Business research quarterly
2017
We examine real activities manipulation by firms prior to their debt issuances and how such manipulation activities affect bond yield spreads. We find that bond-issuing firms
increase their real activities manipulation in the five quarters leading to a bond issuance. We document an inverse association between yield spread and pre-issue real activities manipulation,i.e., firms engaged in abnormally high levels of real activities manipulation are associated with subsequent lower cost of debt.
increase their real activities manipulation in the five quarters leading to a bond issuance. We document an inverse association between yield spread and pre-issue real activities manipulation,i.e., firms engaged in abnormally high levels of real activities manipulation are associated with subsequent lower cost of debt.
Real activitiesmanipulation
Debt issues
Earnings management
EconomÃa y negocios