Abstract
| Language | English |
|---|---|
| Pages | 213-239 |
| Number of pages | 27 |
| Journal | Journal of Financial and Quantitative Analysis |
| Volume | 47 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Feb 2012 |
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Keywords
- rights offerings
- shareholders
- liquidity
- Australia
Cite this
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Rights offerings, subscription period, shareholder takeup and liquidity. / Balachandran, B; Faff, Robert; Theobald, M; Van Zijl, T.
In: Journal of Financial and Quantitative Analysis , Vol. 47, No. 1, 02.2012, p. 213-239.Research output: Contribution to journal › Article
TY - JOUR
T1 - Rights offerings, subscription period, shareholder takeup and liquidity
AU - Balachandran, B
AU - Faff, Robert
AU - Theobald, M
AU - Van Zijl, T
PY - 2012/2
Y1 - 2012/2
N2 - We examine the role of shareholder takeup in rights offerings on the subscription period price reaction and liquidity. Our results indicate that takeup information is reflected in price adjustments over the subscription period and that quality-related information disclosed on the rights announcement date further impacts upon prices in this period. Higher shareholder takeup improves liquidity. We do find some evidence of inefficiencies in the adjustment process over the subscription period which, in part, is consistent with a model where markets are characterized by overconfident investors and which also articulates with takeup information arriving in the market.
AB - We examine the role of shareholder takeup in rights offerings on the subscription period price reaction and liquidity. Our results indicate that takeup information is reflected in price adjustments over the subscription period and that quality-related information disclosed on the rights announcement date further impacts upon prices in this period. Higher shareholder takeup improves liquidity. We do find some evidence of inefficiencies in the adjustment process over the subscription period which, in part, is consistent with a model where markets are characterized by overconfident investors and which also articulates with takeup information arriving in the market.
KW - rights offerings
KW - shareholders
KW - liquidity
KW - Australia
UR - http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1534048
U2 - 10.1017/S0022109011000573
DO - 10.1017/S0022109011000573
M3 - Article
VL - 47
SP - 213
EP - 239
JO - Journal of Financial and Quantitative Analysis
T2 - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
SN - 0022-1090
IS - 1
ER -