Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/64975
Title: A rent-protection explanation for SEO flotation-method choice
Authors: Wu, X
Wang, Z
Yao, J 
Issue Date: 2016
Publisher: Cambridge University Press
Source: Journal of financial and quantitative analysis, 2016, v. 51, no. 3, p. 1039-1069 How to cite?
Journal: Journal of financial and quantitative analysis 
Abstract: We model how a rent-protection motive drives the choice of flotation method in new equity issuance between two polar cases: rights issues and cash offers. Unexpected new blockholders would emerge in control-diluting cash offers and share in jealously guarded control benefits. But rights issues help the incumbent controlling shareholders avoid control dilution and safeguard their private benefits. Under asymmetric information about private benefits, the choice of flotation method can convey information about hidden private benefits and hence firm value. Our model can explain even a negative announcement effect of rights issues, and it supports not just one but three important equilibriums.
URI: http://hdl.handle.net/10397/64975
ISSN: 0022-1090
EISSN: 1756-6916
DOI: 10.1017/S0022109016000314
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

1
Last Week
0
Last month
Citations as of Jul 29, 2018

WEB OF SCIENCETM
Citations

1
Last Week
0
Last month
Citations as of Aug 9, 2018

Page view(s)

36
Last Week
1
Last month
Citations as of Aug 13, 2018

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.