The long-run operating and stock price performance of rights-issuing corporations / by Jason E. Then.

Then, Jason E. (1999). The long-run operating and stock price performance of rights-issuing corporations / by Jason E. Then. Master's Thesis, School of Business, The University of Queensland.

       
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Author Then, Jason E.
Thesis Title The long-run operating and stock price performance of rights-issuing corporations / by Jason E. Then.
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1999
Thesis type Master's Thesis
Total pages 68
Language eng
Subjects 14 Economics
Formatted abstract This thesis examines the long-run post-issue operating and stock return performance of Australian firms conducting rights issues between 1991 and 1994. Recent research in the U.S. indicates that seasoned equity offerings are associated with significant long-run post-issue operating and stock price underperformance. This study investigates whether these post-issue trends reported for U.S. seasoned equity offerings, which are predominantly firm-commitment offers, are also evident in the Australian market for rights issues. The results reveal a clear trend of a pre-issue operating performance increase and a post-issue decline for the primary measure of operating performance used. However, these results differ from U.S. studies in that they are insignificant and not robust to alternative measures of operating performance. For the analysis of the post-issue stock price performance of rights issuers, only one of the three benchmarks employed exhibited a clear trend of long-run underperformance consistent with U.S. studies. The discrepancy between the three benchmarks highlights the sensitivity of the results to the model of expected returns adopted. Overall, while the results of the stock return analysis are inconclusive, the results of the operating performance analysis are consistent with the argument that rights issuers exhibit post-issue normal abnormal performance due to their unique characteristics.

 
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