Equity Rights Issues and the Efficiency of the UK Stock Market

Abstract

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“…As some of the companies in the sample are subject to infrequent trading (perhaps due to their fairly small size (see Table 1)), we apply the trade-to-trade approach to calculate the CAR (Marsh, 1979;Dimson, 1979). The tradeto-trade approach is an adjusted form of the market model.…”

Seasoned equity offerings, operating performance and overconfidence: Evidence from the UK

“…In contrast to the US, where most SEOs are conducted through the use of cash offers, UK companies in past decades predominantly 1 raised new equity by making rights issues (Armitage, 1998;Levis, 1995;Marsh, 1979;Slovin, Sushka, & Lai, 2000). This method allows companies to protect existing shareholders by avoiding the potential dilution of their wealth and loss of control following an equity issue.…”

“…In a study testing the price pressure hypothesis for UK data, Marsh (1979) produced evidence of post-SEO positive abnormal returns. Using a dataset consisting of the entire population of UK rights issues for the period 1962-1975, the author concluded that his results are in favour of semi-strong form efficiency and can be attributed to a small size effect rather than the SEOs' announcements (Marsh, 1979, pp.…”

Equity for Debt Exchanges and Stockholder Wealth

“…In this s and indirect tests to identify ly caused the decrease in v Supply Effect. A possible cess returns pattern observe pressure hypothesis discus [10], and recently, by Asq hypothesis asserts that ne supply/demand imbalance shares to be sold at a discou discount is a positive functi Equity for debt exchanges h to secondary distributions; '4 shares did cause a supply im '1Scholes reported the average pro sample to be 0.0216; the average pro sample was 0.021. Marsh found evidence to support the existence of a '5Copeland and Weston [4], p. 327, discuss the price pressure hypothesis, and present diagrams representing the shape of CPE patterns when price pressure exists.…”