Raising Capital Using Monthly Income Preferred Stock: Market Reaction and Implications for Capital Structure Theory
研究发行月收入优先股（MIPS）对发行公司普通股价格的影响，发现用MIPS赎回优先股能提升公司价值，而用于偿还银行贷款则产生负面市场反应，且信用评级低的公司负面反应更大。
We examine the impact of selling Monthly Income Preferred Stock (MIPS) on the common share prices of the issuing firms. We find that issuing MIPS to retire preferred stock raises the value of the firm, and that government policy can significantly affect the present value of the tax savings. Using proceeds to retire bank loans negatively impacts common share value. This negative response is larger for MIPS users with lower credit ratings on their senior debt. These findings support the view that banks perform a valuable monitoring service, which, if removed, can invoke an adverse market reaction. In October 1993, Goldman Sachs introduced the financial world to a hybrid security called monthly income preferred stock (MIPS), which is structured to give the issuer the best of both worlds. MIPS is deeply subordinated debt that is repackaged as preferred stock. 1 The rating agencies consider MIPS tantamount to preferred stock. So far, the Internal Revenue Service has allowed the issuer to deduct preferred dividends as interest for tax purposes. This means that issuing MIPS enables the firm to increase its equity base at an after-tax cost nearly equal to that of long-term debt. Because of these features, MIPS now dominates the market for traditional perpetual preferred equity, presently