search query: @author Scholes, M. S. / total: 8
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| Author: | Scholes, M. S. Wolfson, M. H. |
| Title: | Decentralized investment banking. The case of discount dividend-reinvestment and stock-purchase plans |
| Journal: | Journal of Financial Economics
1989 : SEP, VOL. 24:1, p. 7-35 |
| Index terms: | INVESTMENT BANKS DIVIDENDS SHAREHOLDERS DISCOUNT RATE PROFIT STOCKBROKING |
| Language: | eng |
| Abstract: | Discount dividend-reinvestment and stock-purchase plans allow shareholders to capture part of the underwriting fees incurred in new stock offerings and save sponsoring firms some of the usual underwriting costs. It is tested to what degree individual investors can profitably serve this investment banking function by implementing simple investment/trading strategies designed to capture the discounts and distribute the shares in the market. The large profits earned by these strategies raise questions about why it takes firms so long to raise the target level of capital and why many eligible shareholders do not participate in the discount plans. |
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