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Discussion: on the Pricing of Preferred Stock

Published online by Cambridge University Press:  06 April 2009

J. Ronald Hoffmeister
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Extract

Professors Sorensen and Hawkins (hereafter SH) have utilized regression analysis to examine the pricing of preferred stocks both before and after a particular event. This event, the NAIC event, occurred in 1979 when the National Association of Insurance Commissioners (NAIC) adopted a rule permitting insurance companies to carry sinking fund preferred issues at book value rather than at the market value required before. SH results indicate nine to 12 variables have a significant effect on the pricing of preferred stock.

Type
Security Valuation and the Sinking Fund Provision
Information
Journal of Financial and Quantitative Analysis , Volume 16 , Issue 4 , November 1981 , pp. 529 - 531
Copyright
Copyright © School of Business Administration, University of Washington 1981

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References

REFERENCES

[1]Dyl, E.A., and Joehnk, M. D.. “Sinking Funds and the Cost of Corporate Debt.” Journal of Finance, Vol. 34 (09 1979), pp. 887–893.CrossRefGoogle Scholar
[2]Lintner, J. “Corporate Growth under Uncertainty.” The Corporate Economy, Morris, Robin, ed. London: MacMillan (1971).Google Scholar