Firm age, idiosyncratic risk, and long-run SEO underperformance

Huang, Chia Wei; Ho, Po Hsin; Lin, Chih Yung; Yen, Ju Fang

doi:10.1016/j.iref.2014.08.009

Cited by 16 publications

(25 citation statements)

References 70 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…There are two commonly used models that could be applied to estimate the cost of capital, the capital asset pricing model or the Fama and French (1992). However, there is no substantive evidence that the three-factor model is a better model than the other.…”

Section: Return On Equity For Period T + Imentioning

confidence: 99%

Secondary Equity Offerings Long Run Underperformance: Puzzle or Mistake

Har

Visvanathan

2018

Asian Economic and Financial Review

View full text Add to dashboard Cite

Article History JEL Classification: D63This study examines whether misvaluation which causes long run underperformance is present when firms issue additional equity and if firms time the additional equity issue when market as a whole overvalues the firms, in order to capitalise on the value appreciation. The overvaluation is measured as the difference between the market value of the issuing firm 30 days prior to the equity issue date and the fundamental value of the firm 1 year prior to the day of equity issue. The fundamental value is quantified using the residual income valuation method. The results are partially consistent with the existing empirical literature, as misvaluation is present when firms issue additional equity. However, firms do not specifically time the issuance of equity with overall market overvaluation as based on the results collected, more additional equity were issued when misvaluation levels were lower.

show abstract

Section: Return On Equity For Period T + Imentioning

confidence: 99%

Secondary Equity Offerings Long Run Underperformance: Puzzle or Mistake

Har

Visvanathan

2018

Asian Economic and Financial Review

View full text Add to dashboard Cite

show abstract

“…Earlier studies have indicated that investors who invest in SEOs often exhibit excessive and irrational optimism. This optimism increases investor willingness to purchase stocks at higher prices causing temporary overvaluations [42]. Additionally, managers will use this opportunity for stock issuance provided they are able to establish that the market is ready to pay more for their stocks.…”

Section: Introductionmentioning

confidence: 99%

“…Therefore, agency costs increase as the separation of ownership and control after issuance leads to greater conflict between managers and shareholders [42]. Furthermore, the inability of companies to use accumulated capital appropriately can bring about agency problems which will further damage the firm value, at the same time that of the shareholders wealth.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Corporate Governance and the Performance of Seasoned Equity Offering Firms in Nigeria: The Mediating Effect of Agency Costs

Bello¹

2016

JFA

View full text Add to dashboard Cite

The objective of this study is to implement Analysis of Moment Structure (AMOS) at the same time analysing the power of corporate governance on Post-Seasoned Equity Offerings (SEO's) performance as well as in determining whether agency costs exist as a mediating variable between them. We conjecture that the mediating function of agency costs reduction is fundamental to the causal relationship between corporate governance and Post-SEO underperformance. Failure to tackle agency costs as a mediating variable may perhaps be one reason for the inconclusive findings in the allied literature. This study intends to focus on an SEO sample, for the reason that it is essential to evaluate how better corporate governance mechanisms can enhance SEO performance by estimating the relationship between different variables. To achieve this, the study will apply the approach and analyse SEOs in Nigeria from 2005-2015.

show abstract

“…Ang et al, 2009;Fu, 2009;A. Ang et al, 2006;Xu & Malkiel, 2003;Campbell et al, 2001), leverage (Gerlach et al, 2015;Mishra et al, 2012), credit rating (Y.-M. Lin & Shen, 2015;Abad & Robles, 2014), rm age (C.-W. Huang et al, 2014), CEO compensation (Balafas & Florackis, 2014), nancial reporting quality (Rajgopal & Venkatachalam, 2011), cash ows (Babenko et al, 2015;D. Huang & Wang, 2009), diversication (Casu et al, 2015;Roussanov, 2010), human capital (Eiling, 2013), product market competition (Irvine & Ponti, 2008), corporate sustainability (Mishra et al, 2012; K.-W. Lee & Lee, 2009), consumer voice (Luo, 2007), innovation (Mazzucato & Tancioni, 2008), stock valuation (Pastor & Pietro, 2003), ownership (Xu & Malkiel, 2003), and investor base (Chichernea et al, 2015).…”

Section: Idiosyncratic Risk and Cash Holdingsmentioning

confidence: 99%

Essays in cash holdings

Cruz¹

View full text Add to dashboard Cite

show abstract

Firm age, idiosyncratic risk, and long-run SEO underperformance

Cited by 16 publications

References 70 publications

Secondary Equity Offerings Long Run Underperformance: Puzzle or Mistake

Secondary Equity Offerings Long Run Underperformance: Puzzle or Mistake

Corporate Governance and the Performance of Seasoned Equity Offering Firms in Nigeria: The Mediating Effect of Agency Costs

Essays in cash holdings

Contact Info

Product

Resources

About