Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/90025
Title: How economic policy uncertainty affects the cost of raising equity capital : evidence from seasoned equity offerings
Authors: Chan, YC 
Saffar, W 
Wei, KCJ 
Issue Date: Apr-2021
Source: Journal of financial stability, Apr. 2021, v. 53, 100841
Abstract: Economic policy uncertainty (EPU) increases the cost of raising equity capital, especially when the economy is weak. A one standard deviation increase in the EPU index developed by Baker, Bloom, and Davis (2016) is associated with a 43 basis point increase in the price discount of seasoned equity offerings (SEOs) during the 2000−2014 period. The cross-sectional analysis shows that the EPU effect on SEO discounts is stronger for firms with greater dependence on government spending, less informative stock price, or a smaller EPU beta. Moreover, there are fewer SEO activities in periods when there is a high degree of policy uncertainty.
Keywords: Economic policy uncertainty
Seasoned equity offerings
SEO discounts
Publisher: Elsevier
Journal: Journal of financial stability 
ISSN: 1572-3089
EISSN: 1878-0962
DOI: 10.1016/j.jfs.2020.100841
Appears in Collections:Journal/Magazine Article

Open Access Information
Status embargoed access
Embargo End Date 2023-04-29
Access
View full-text via PolyU eLinks SFX Query
Show full item record

Page views

10
Citations as of Jul 3, 2022

SCOPUSTM   
Citations

13
Citations as of Jun 30, 2022

WEB OF SCIENCETM
Citations

11
Citations as of Jun 30, 2022

Google ScholarTM

Check

Altmetric


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