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http://ssrn.com/abstract=1920985
 
 

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Measuring Equity Issuance


Stephen B. McKeon


University of Oregon - Department of Finance

October 26, 2014


Abstract:     
Cash proceeds from employees' exercise of options are substantial, totaling over $1 trillion in aggregate since 1985. Although reported as equity proceeds, these option exercises are unlikely to inform us about how contemporaneous conditions influence managers' motives to issue equity, because the option grant decision is typically made years prior to the share issuance. Because equity issuance data available through Compustat and CRSP pool all issuance mechanisms into a single figure, option proceeds are commingled with IPOs, SEOs, and private placements. I demonstrate that a filter for pooled data effectively identifies the firm-initiated component, leading to sharper inferences in empirical tests.

Number of Pages in PDF File: 46

Keywords: employee stock options, financing decisions, capital structure, cash holdings

JEL Classification: G14, G32

working papers series





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Date posted: September 2, 2011 ; Last revised: November 7, 2014

Suggested Citation

McKeon, Stephen B., Measuring Equity Issuance (October 26, 2014). Available at SSRN: http://ssrn.com/abstract=1920985 or http://dx.doi.org/10.2139/ssrn.1920985

Contact Information

Stephen B. McKeon (Contact Author)
University of Oregon - Department of Finance ( email )
Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States
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