Long term performance and choice of SEO method by UK firms

J. Capstaff, Jonathan Fletcher

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

The long term performance of firms making seasoned equity offerings (SEOs) in the UK, in an era of discretion over the choice of issue method, is shown to differ according to the chosen method across a number of different models of expected returns. The combination of prior and post-SEO performance suggests that rights offering firms are less likely to time offers to exploit overvaluation than firms using placings. When judged on a long term basis rights offering firms are not of lesser quality than firms that choose other offering methods.
Original languageEnglish
Pages (from-to)1262-1289
Number of pages28
JournalJournal of Business Finance and Accounting
Volume38
Issue number9-10
DOIs
Publication statusPublished - Nov 2011

Keywords

  • market-efficiency
  • seasoned equity offerings
  • adverse selection
  • rights issues
  • open offers
  • timing hypothesis
  • long term performance
  • quality of rights offering firms
  • price performance
  • puzzle
  • abnormal stock returns
  • seasoned-equity issues
  • issuance

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