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Rights offerings, takeup, renounceability, and underwriting status

Balachandran, B and Faff, Robert and Theobald, M (2008) Rights offerings, takeup, renounceability, and underwriting status. Journal of Financial Economics, 89 (2). pp. 328-346. ISSN 0304-405X

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Abstract

Rightsofferings in Australia provide valuable choices to the issuer in terms of both underwriting and renounceability. We formulate a set of hypotheses from a quality-signaling perspective, affording an analysis of the key interrelations between quality, underwriting status, renounceability, takeup, and subscription price discount. We analyse rightsofferings from two perspectives: market reaction to rights announcements and identification of the factors driving the choice of issue type. Evidence strongly supports the relation between quality signals and issue type. Using a robustly constructed takeup variable, we establish empirical relations between takeup, underwriting status, and renounceability that differ significantly from those previously reported, but which are consistent with the hypotheses developed in this paper

Item type: Article
ID code: 41062
Keywords: rights offerings, underwriting status, renouceability, takeup, ownership concentration, australia, market reaction , quality signals , issue type, Accounting, Finance, Economics and Econometrics, Accounting, Strategy and Management
Subjects: Social Sciences > Commerce > Accounting
Department: Strathclyde Business School > Accounting and Finance
Related URLs:
    Depositing user: Pure Administrator
    Date Deposited: 10 Sep 2012 15:47
    Last modified: 05 Sep 2014 17:39
    URI: http://strathprints.strath.ac.uk/id/eprint/41062

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