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Bond calls, credible commitment and equity dilution: A theoretical and clinical analysis of Simultaneous Tender and Call (STAC) offers

Abstract:

This paper is an exploration of the ability of game theory to explain real-world corporate maneuvering. We explore this issue by investigating bond tender offers accompanied by a threat to call nontendered bonds, so called "Simultaneous Tender and Call" (STAC) offers. We argue that STACs engender a transparent game played by bondholders and shareholders. We model this game and use this model to predict the outcome of STACs. Finally, we investigate the issue of whether this theoretical model e...

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Thomas Noe More by this author
Upinder Dhillon More by this author
Gabriel Ramirez More by this author
Publication date:
2001
URN:
uuid:db538ade-9f26-4554-aba1-0ccf15a783e0
Local pid:
oai:eureka.sbs.ox.ac.uk:1120

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