The Choice of Seasoned-Equity Selling Mechanism: Theory and Evidence

@article{Eckbo2004TheCO,
  title={The Choice of Seasoned-Equity Selling Mechanism: Theory and Evidence},
  author={B. Espen Eckbo and Oyvind Norli},
  journal={Banking \& Financial Institutions eJournal},
  year={2004}
}
Extending the Myers and Majluf (1984) framework, we present a model for the choice of seasoned-equity selling mechanism. A sequential pooling equilibrium exists which implies a positive market reaction to certain flotation strategies. We examine the model implications using the market reaction to issues on the Oslo Stock Exchange using the full range of flotation methods. The average market reaction is non-negative across all methods, and significantly positive for both rights offerings and… 
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