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Article: The Impact of REIT Ratings on Stock Price and Shareholder Wealth Author: Klaus S. Beckmann Start Page: 134 Abstract: We have analyzed the market reaction to REIT preferred stock ratings announced by Moody's Investors Service from 1999 to 2009 that are related to four types of rating events; first time ratings, outlook changes, reviews and actual rating changes. The results suggest a significant market reaction to rating upgrades of 1.08% abnormal return, and downgrades and negative outlooks of -2.28% and -2.67% abnormal returns, respectively. Compared to the non-REIT literature, the abnormal returns are smaller in magnitude which implies a relatively smaller information asymmetry within the REIT market with diversification opportunities for global investors
Keywords REITs; Preferred Stock Rating; Information Asymmetry; Asset Pricing; Investment Strategy
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