Issuance Expenses and Common Stock Offerings for Over-the-Counter Firms
AbstractThis study explores the role of issuance expenses in explaining the fall in stock value for OTC stock offerings that raise cash for debt reduction purposes. It estimates that over half of the sample's -2.79% two-day fall in stock value can be accounted for by issuance expenses when using a lower bound measure of issuance expenses. This estimate contrasts with the one-fifth estimate suggested by NYSE/AMEX studies that examine stock offerings that raise cash primarily for non-debt reduction purposes. The influence of issuance expenses is shown to be substantially greater when combination offerings are deleted, an upper bound measure of issuance expenses is employed, or the sample is restricted to those offerings with the greatest issuance expenses per outstanding share.
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Bibliographic InfoArticle provided by Pepperdine University, Graziadio School of Business and Management in its journal Journal of Small Business Finance.
Volume (Year): 3 (1993)
Issue (Month): 1 (Fall)
Issuance Expenses; Issuance Fees; Stock Offerings; Over-the-Counter; OTC;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- 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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