Issuance of warrants in seasoned equity offerings: evidence from rights offerings

Balachandran, Balasingham and Kanapathipillai, Sutharson and Krishnamurti, Chandrasekhar and Theobald, Michael and Velayutham, Eswaran (2010) Issuance of warrants in seasoned equity offerings: evidence from rights offerings. In: FCGC 2010: Inaugural Finance and Corporate Governance Conference, 7-9 Apr 2010, Melbourne, Australia.

[img] PDF (Documentation - Conference program)
2010-gsm-fcgc-program.pdf

Download (5Mb)

Abstract

The Australian financial market is unique in enabling firms to raise new capital via right offerings of standalone warrants in seasoned equity offerings. As such, it provides an ideal environment for examining the validity of the Chemmanur and Fulghieri's (1997) signaling model for warrant inclusion in seasoned equity offerings via rights offerings by analyzing across unit offerings, standalone warrants and standalone equity. We provide empirical evidence in support of their model's predictions regarding the issuance of warrants to existing shareholders. The quality dimension contained in the signals is associated with a more favorable stock price reaction, ceteris paribus.


Statistics for USQ ePrint 19681
Statistics for this ePrint Item
Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: Copyright La Trobe University. See Program at http://www.latrobe.edu.au/__data/assets/file/0003/67305/2010-gsm-fcgc-program.pdf Author version title: The Choice of Equity Offerings to Existing Shareholders: Unit Offerings, Standalone Warrants versus Standalone Equity
Depositing User: epEditor USQ
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 01 Dec 2011 04:51
Last Modified: 03 Jul 2013 00:47
Uncontrolled Keywords: issuance choice; rights offerings; unit offerings; standalone warrants; equity offerings; agency cost hypothesis; signaling theory; Australia
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150203 Financial Institutions (incl. Banking)
18 Law and Legal Studies > 1801 Law > 180112 Equity and Trusts Law
Socio-Economic Objective (SEO2008): E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
URI: http://eprints.usq.edu.au/id/eprint/19681

Actions (login required)

View Item Archive Repository Staff Only