Underperformance in long-run stock returns following seasoned equity offerings
Article Abstract:
The tendency of firms which offered seasoned equity offerings to underperform compared to nonissuing firms was examined. Data from 1,247 firms which issued seasoned equities from 1975 to 1989 as recorded in Investment Dealers' Digest Directory of Corporate Financing were analyzed. It was discovered that the underperformance of issuing firms were similar to returns reported by initial public offerings. The median return for seasoned equity offerings was measured at 10% while the return for nonissuing firms was 42.3%. It was suggested that underperformance is due to miscalculation of relative risks.
Publication Name: Journal of Financial Economics
Subject: Economics
ISSN: 0304-405X
Year: 1995
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The calendar structure of risk and expected returns on stocks and bonds
Article Abstract:
The rate of return for stocks and bonds during the last half of the 20th century and the influence of the date on the potential risks of the investment are examined.
Publication Name: Journal of Financial Economics
Subject: Economics
ISSN: 0304-405X
Year: 2003
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