|분야||: 사회과학 > 관광학|
|간행물정보||: 한국호텔외식경영학회 학술발표논문집, 2015 pp.~16 (총 17pages)|
ISSUANCE OF PREFERRED STOCK BY HOSPITALITY FIRMS
DATA AND METHOD
LOGISTIC REGRESSION ANALYSIS
|Several motivations have been offered for the use of preferred stock to raise capital. Reasons offered include financial reporting motivations, an increased probability of financial distress of the issuing firm, a low or zero percent marginal tax rate of the issuing firm, and the high marginal tax rate of investing firms.
We tested financial distress theory using five financial ratios for preferred stock issuers and the weighted average of non-issuing firms (control group) for a sample of hospitality firms issuing preferred stock between 1980 and 2012. The results show debt ratio of issuers are significantly higher than nonissuers and retained earnings to total assets, times interest earned, net profit margin and return on assets ratios are significantly lower than non-issuers which is consistent with the financial distress explanation as well as other explanations of preferred stock use including financial reporting motivation, and low tax rate motivation. This supports the proposition that hospitality preferred stock issuers have higher financial distress than non-issuers.
|Preferred stock, restaurant industry, hotel industry, lodging industry, financial distress|