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When and why do Austrian companies issue shares?

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Abstract

This paper examines the issuance of share capital via the Vienna Stock Exchange between 1985 and 2004. Evidence is supplied concerning the aggregate factors that explain the time-series variation in both the numbers of and proceeds from initial public offerings (IPOs) and seasoned equity offerings (SEOs). Results indicate that there is no cyclical sensitivity of issues, but that firms successfully time their offerings to take advantage of high stock market valuations and the associated low cost of equity capital. Corporate indebtedness and interest rates are significant determinants of SEOs in statistical and economic terms. The proceeds from IPOs, rather than funds raised by firms that are already listed, are used to finance subsequent investment.

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File URL: http://www.econ.jku.at/papers/2005/wp0503.pdf
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Bibliographic Info

Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2005-03.

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Date of creation: Apr 2005
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Handle: RePEc:jku:econwp:2005_03

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Keywords: Initial public offerings; seasoned equity offerings; corporate finance; capital structure; share issuance; going public; capital demand; stock market; cost of capital.;

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Cited by:
  1. Tomas Meluzin, Marek Zinecker, 2013. "Trends in IPOs: The Evidence From Financial Markets," Equilibrium, Uniwersytet Mikolaja Kopernika, vol. 8, pages 46-63.
  2. Mayur, Manas & Kumar, Manoj, 2006. "An Empirical Investigation of Going Public Decision of Indian Companies," MPRA Paper 1801, University Library of Munich, Germany.

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