search query: @indexterm warrants / total: 25
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| Author: | How, J.C.Y. Howe, J.S. |
| Title: | Warrants in initial public offerings: empirical evidence |
| Journal: | Journal of Business
2001 : JUL, VOL. 74:3, p. 433-457 |
| Index terms: | AGENCIES INITIAL PUBLIC OFFERINGS SIGNALING WARRANTS AUSTRALIA |
| Language: | eng |
| Abstract: | The authors investigate why firms include warrants in their initial public offerings (IPOs). They use a data set of Australian IPOs to examine two hypotheses about the inclusion of warrants in an IPO. The agency-cost hypothesis emphasizes the need for sequential financing for relatively young firms, because sequential financing reduces the opportunities for managers to squander money on unprofitable projects. The signaling hypotheses focuses on the choice of securities as a signaling mechanism in a market characterized by information asymmetry. |
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