Seasoned Equity Offerings: An Empirical Investigation
Ashok N Korwar
affiliation not provided to SSRN
Ronald W. Masulis
University of New South Wales - Australian School of Business; European Corporate Governance Institute (ECGI); Financial Research Network (FIRN)
Journal of Financial Economics, Vol. 15, No. 1/2, pp. 91-118, 1986
This study examines common stock price adjustments to announcements of underwritten common stock offerings. On average, a negative stock price change is observed, which is larger for industrials than for public utilities. Combination primary-secondary stock offerings and dual stock-bond offerings exhibit similar negative announcement effects. Combination offerings involving decreases in management shareholdings exhibit significantly larger negative announcement effects. Cross sectional analysis of stock announcement returns indicates a positive relationship to firms' leverage changes, and a negative relationship to prior stock returns and (for industrials) to decreases in management shareholdings.
Number of Pages in PDF File: 45
Keywords: SEOs, seasoned equity offerings, stock offers, announcement effects, primary offers, secondary offers
JEL Classification: G14, G32
Date posted: February 6, 2007
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