Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Eric Hughson

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Rights Information

©2019 James A Plunk


This paper explores how equity market reactions to the issuance of debt by biotechnology firms differ from other industries, due to informational content differences. It uses data from January 1st of 2000 to November 1st of 2019, consisting of 132 observations. Employing event study methodology, this paper examines 3-day cumulative abnormal returns centered on the date of debt announcements in order to determine whether biotechnology companies’ announcements consistently contain more positive information. It compares the CAR’s of biotechnology to advertising and marketing in order to isolate the key differences. This study finds no support for the hypothesis that the CAR’s will be consistently greater for biotech firms. It does find significant differences between the two industries returns when the debt proceeds are used for refinancing, indicating that informational differences exist, which could be an area of future research.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.