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Issue Costs and Common Stock Offerings


  • Robert M. Hull
  • Robert Kershner


Prior research of common stock offerings reaches different conclusions concerning the impact of issue costs on stock value. We identify factors that can best explain the different findings - most prominent are the issue costs measure and the listing. We investigate 323 common stock offerings and find that $61 of every $100 fall in stock value can be attributed to issue costs. The respective dollar amounts for the samples of OTC, AMEX, and NYSE firms are $72, $69, and $38. These findings suggest that the collective impact of the negative wealth effects from managerial signaling may be less important than generally assumed.

Suggested Citation

  • Robert M. Hull & Robert Kershner, 1996. "Issue Costs and Common Stock Offerings," Financial Management, Financial Management Association, vol. 25(4), Winter.
  • Handle: RePEc:fma:fmanag:hull96

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    Cited by:

    1. Robert M. Hull & Sungkyu Kwak & Rosemary L. Walker, 2010. "Insider signaling and seasoned equity offerings," Managerial Finance, Emerald Group Publishing, vol. 36(8), pages 703-721, July.

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