Date of Degree


Document Type


Degree Name





Armen Hovakimian

Committee Members

Michael Grossman

Thom Thurston

Subject Categories



This dissertation consists of two essays on corporate finance. In the first essay we test the pecking order theory by examining how firms finance maturing long-term debt. This allows us to accomplish three goals: resolve the issues of debt capacity and the endogeneity of financing deficit; examine the role of internal financing; and generate evidence regarding the order in which different sources of financing are used. We determine that firms use internal funds before they issue new debt to refinance maturing long-term debt. Firms with more cash on hand are less likely to issue new debt to refinance. On average, each marginal dollar of maturing long-term debt is fully financed with the issuance of new debt.

In the second essay, we study characteristics of Specified Purpose Acquisition Companies (SPACs) and examine the performance of their securities over time. We find that SPACs represent a fairly unique way to raise capital, The incentives of their founders, underwriters, and investors are interdependent and successful business combinations generally result in significant returns to founders. We also show that different SPAC securities generate different reactions in response to the announcement news regarding their corporate status. While holders of all three securities realize abnormal returns on the announcement day, the strongest reaction is observed among the investors holding warrants, while common stock holders tend to react very mildly.


Digital reproduction from the UMI microform.

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Economics Commons