TY - JOUR
T1 - Firm value and seasoned equity issues. Price pressure, wealth redistribution, or negative information
AU - Kalay, Avner
AU - Shimrat, Adam
PY - 1987/9
Y1 - 1987/9
N2 - Announcements of new equity issues have been seen to have a negative effect on stock prices. Potential explanations of this negative effect - the price-pressure, wealth-redistribution, and information-release hypotheses - imply different bond-price reactions to the announcements. By investigating bond-price behavior around the announcement of new equity issues this paper distinguishes the relative importance of these hypotheses. The evidence presented of a significant drop in bond prices is consistent with the information-release hypotheses.
AB - Announcements of new equity issues have been seen to have a negative effect on stock prices. Potential explanations of this negative effect - the price-pressure, wealth-redistribution, and information-release hypotheses - imply different bond-price reactions to the announcements. By investigating bond-price behavior around the announcement of new equity issues this paper distinguishes the relative importance of these hypotheses. The evidence presented of a significant drop in bond prices is consistent with the information-release hypotheses.
UR - http://www.scopus.com/inward/record.url?scp=38249033843&partnerID=8YFLogxK
U2 - 10.1016/0304-405X(87)90031-6
DO - 10.1016/0304-405X(87)90031-6
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AN - SCOPUS:38249033843
SN - 0304-405X
VL - 19
SP - 109
EP - 126
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 1
ER -
