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Underpricing Of Seasoned Equity Offerings By Canadian Cross-Listed Firms In The Pre- And Post-Sarbanes-Oxley Periods

Author

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  • Arturo Rubalcava

Abstract

This paper examines the impact of the Sarbanes-Oxley Act of 2002 on underpricing of seasoned equity offerings by Canadian cross-listed firms and its determinants. It finds underpricing is not significantly different between the pre- and post-Sarbanes-Oxley periods. When distinguishing underpricing by two methods of choice for underwriting seasoned equity offerings -bought deals vs. firm commitment-, underpricing is higher for firm commitment than for bought deals during the overall period 1995-2008 and the post-Sarbanes period, after controlling for offer and firm characteristics. In addition, underpricing of bought deals and firm commitment are subject to different determinants for the pre- and post-Sarbanes periods, respectively. The main reason underpricing is high on firm commitment, after the passage of the Act, is for global offers. This suggests issuing equity globally has been unfavorable for firm commitment after the passage of the Act.

Suggested Citation

  • Arturo Rubalcava, 2016. "Underpricing Of Seasoned Equity Offerings By Canadian Cross-Listed Firms In The Pre- And Post-Sarbanes-Oxley Periods," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 10(1), pages 27-37.
    • Handle: RePEc:ibf:ijbfre:v:10:y:2016:i:1:p:27-37
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    More about this item

    Keywords

    Sarbanes-Oxley Act; Seasoned Equity Offerings; Cross-listed; Underpricing; Bought Deals; Firm Commitment;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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