- Title
- Explanations of cycles in seasoned equity offerings: An examination of the choice between rights issues and private placements
- Creator
- Melia, Adrian; Chan, Howard; Docherty, Paul; Easton, Steve
- Relation
- Pacific-Basin Finance Journal Vol. 50, p. 16-25
- Publisher Link
- http://dx.doi.org/10.1016/j.pacfin.2018.02.006
- Publisher
- Elsevier
- Resource Type
- journal article
- Date
- 2018
- Description
- A feature of the Australian equity market is that, unlike all other equity markets, private placements and rights issues are used more frequently than public offerings. This study examines time-variation in these types of seasoned equity offerings (SEOs), to examine choice between them, and to enhance our understanding of the reasons for time-variation in SEOs. Time-variation in information asymmetry, the demand for capital, and investment sentiment, together with market timing, are explanations for this cyclicality in SEO issuance; although the drivers of time-variation differ across SEO types. Time-variation in the demand for capital has a statistically and economically significant impact on time-variation in private placements, while time-variation in investor sentiment has a statistically and economically significant impact on the prevalence of rights issues. Market timing and information asymmetry do not have explanatory power for variation in SEO activity.
- Subject
- SEO; rights issue; private placement; information asymmetry; demand for capital; investor sentiment
- Identifier
- http://hdl.handle.net/1959.13/1465947
- Identifier
- uon:47418
- Identifier
- ISSN:0927-538X
- Language
- eng
- Reviewed
- Hits: 444
- Visitors: 443
- Downloads: 0