Is there a window of opportunity for seasoned equity issuance?
Article Abstract:
The aggregate volume of equity issues is used to search for periods when seasoned equity capital can be raised at favorable terms. We find that the price reaction to equity issue announcements in high equity issue volume (HOT) periods is approximately 200 basis points lower on average than in low equity issue volume (COLD) periods. The lower price reaction in hot markets is economically important and is independent of the macroeconomic characteristics of hot and cold markets. The evidence supports the existence of windows of opportunity for equity issues that result at least partially from reduced levels of asymmetric information. (Reprinted by permission of the publisher.)
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1996
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The information value of bond ratings
Article Abstract:
Issues related to the value of bond rating reports are examined, focusing on how security prices may change in response to rating changes and, particularly, focusing on how security prices changed near April 26, 1982, when Moody's Investor Service began reporting ratings. Topics include a background of bond ratings and rating procedures and the conclusion that rating services provide valuable information.
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 2000
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