The Choice between Public Issues and Private Placements of Equity in Brazil
Year: 2007
Type: preprint
Abstract: This article studies publicly traded firms' decision to use public issues or private placements of equity as a source of capital in Brazil. The national and international literature on the subject is reviewed. The empirical evidence of placements of the Brazilian capital market and the characteristics of the issuers are also presented. Two models are constructed to predict the firm's choice: Multiple Discriminant Analysis and Logistic Regression, relating the characteristics of firms and issues to the decision as to the type of issue. The results show that firms with less liquidity in trading, more debt, lower returns on equity, lower profits, more concentration of control and smaller issue volumes have a greater probability of using private issues.
Source: SSRN Electronic Journal
Authors: Ricardo Bordeaux-Rêgo, Walter Lee Ness
Institution: Pontifícia Universidade Católica do Rio de Janeiro
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2262249939