Rights offerings, takeup, renounceability, and underwriting status

Balachandran, Balasingham, Faff, Robert and Theobald, Michael (2008) Rights offerings, takeup, renounceability, and underwriting status. Journal of Financial Economics, 89 2: 328-346. doi:10.1016/j.jfineco.2007.11.001

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Author Balachandran, Balasingham
Faff, Robert
Theobald, Michael
Title Rights offerings, takeup, renounceability, and underwriting status
Journal name Journal of Financial Economics   Check publisher's open access policy
ISSN 0304-405X
Publication date 2008-08-01
Sub-type Article (original research)
DOI 10.1016/j.jfineco.2007.11.001
Volume 89
Issue 2
Start page 328
End page 346
Total pages 19
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Abstract Rights offerings in Australia provide valuable choices to the issuer in terms of both underwriting and renounceability. We formulate a set of hypotheses from a quality-signaling perspective, affording an analysis of the key interrelations between quality, underwriting status, renounceability, takeup, and subscription price discount. We analyse rights offerings from two perspectives: market reaction to rights announcements and identification of the factors driving the choice of issue type. Evidence strongly supports the relation between quality signals and issue type. Using a robustly constructed takeup variable, we establish empirical relations between takeup, underwriting status, and renounceability that differ significantly from those previously reported, but which are consistent with the hypotheses developed in this paper. © 2008 Elsevier B.V. All rights reserved.
Keyword Rights offerings
Ownership concentration
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collection: UQ Business School Publications
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Citation counts: TR Web of Science Citation Count  Cited 22 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 22 times in Scopus Article | Citations
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Created: Fri, 04 Mar 2011, 19:40:26 EST by Karen Morgan on behalf of UQ Business School