Seasoned Equity Offerings: An Empirical Investigation

45 Pages Posted: 6 Feb 2007  

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); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

Abstract

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.

Keywords: SEOs, seasoned equity offerings, stock offers, announcement effects, primary offers, secondary offers

JEL Classification: G14, G32

Suggested Citation

Korwar, Ashok N and Masulis, Ronald W., Seasoned Equity Offerings: An Empirical Investigation. Journal of Financial Economics, Vol. 15, No. 1/2, pp. 91-118, 1986. Available at SSRN: https://ssrn.com/abstract=961034

Ashok N Korwar

affiliation not provided to SSRN

No Address Available

Ronald W. Masulis (Contact Author)

University of New South Wales - Australian School of Business ( email )

Sydney, NSW 2052
Australia
612-9385-5860 (Phone)
612-9385-6347 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

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