Work

The Pricing of French Unit Seasoned Equity Offerings

Year: 2001

Type: article

Abstract: Units are bundles of common stock and warrants. By issuing units, firms precommit to a future and uncertain seasoned offering at the exercise price of the warrants. This study shows that the issuance of units seasoned offerings in France is accompanied by significant abnormal returns of on average 9–12%, depending on the computing methods. Underpricing increases with the risk of the issuer and the relative size of the future seasoned equity issue linked to warrant exercises. Our results are consistent with our signaling hypothesis.

Source: European Financial Management

DOI: 10.1111/1468-036x.00143

Authors: Pierre Chollet, Edith Ginglinger

Institutions: Aix-Marseille Université, Université Aix-Marseille-III, Centre de Recherche sur le Transport et la Logistique, Université Paris-Est Créteil, Institut de Recherche en Gestion

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2103278902

FWCI: 2.247

Cites:

Cited by: 16

Related to: 10