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| 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. |
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