Tekijä: | Lucas, D.J. MC Donald, R.L. |
Otsikko: | Equity issues and stock price dynamics |
Lehti: | Journal of Finance
1990 : SEP, VOL. 45:4, p. 1019-1043 |
Asiasana: | STOCK MARKETS NEW ISSUES SHARE PRICES FINANCIAL MODELS PROJECT FINANCING |
Kieli: | eng |
Tiivistelmä: | An information-theoretic, infinite horizon model of the equity issue decision is presented. The model predicts that (a) equity issues on average are preceded by an abnormal positive return on the stock; (b) equity issues on average are preceded by an abnormal rise in the market; and (c) the stock price drops at the announcement of an issue. The model provides a measure of the welfare cost of asymmetric information; the welfare loss may be small even if the price drop at issue announcement is large. |
SCIMA