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Determinants Of Price Response To Canadian Bought Deals And Marketed Underwritten Equity Offers: Evidence Before And After The Canadian Sox

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  • Arturo Rubalcava

Abstract

This paper examines determinants of price response to announcing Canadian bought deals and marketed underwritten equity offers. It includes periods before and after the passage of Canadian SOX. This is a critical government law equivalent to the U.S. Sarbanes-Oxley Act. Both laws have had important effect on changes in governance and compliance for public companies. Bought deals and marketed underwritten offers are two standard methods of issuing equity by publicly traded firms. Did the Canadian law influence the determinants of price response for both underwriting methods? From fifteen different determinants, this study shows trading shares volume is the only common determinant for bought deals for the pre- and post-Canadian SOX periods. Mostly, for shares listed on the Toronto Stock exchange (and not cross-listed in the U.S.). Marketed underwritten offers do not show consistent determinants for the pre- and post-Canadian SOX periods. Also, none of the expected determinants are significant during the post-Canadian SOX period for marketed underwritten offers. In essence, the Canadian law had a different effect on expected determinants for bought deals and marketed underwritten offers, respectively.

Suggested Citation

  • Arturo Rubalcava, 2021. "Determinants Of Price Response To Canadian Bought Deals And Marketed Underwritten Equity Offers: Evidence Before And After The Canadian Sox," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 15(1), pages 19-32.
    • Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:19-32
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    More about this item

    Keywords

    Deals; Marketed Underwritten Offers; Canadian SOX; Sarbanes- Oxley; Seasoned Equity Offerings; Cross-Listed;
    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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