Abstract
The findings of this study indicate that although the overall announcement effect of equity offerings is negative on the issuing firms' common stock prices, 23 percent of the sample firms have a positive two-day announcement period stock abnormal return (CAR). Further tests show that firms in the positive CAR group have significantly higher research and development (R&D) and profitability than firms in the negative CAR group, while the average leverage ratio of firms in the positive CAR group are significantly lower. Results of the regression analysis suggest a positive relation between the price effect and R&D as well as the profitability ratio. It also is found that only in the sample of large R&D firms is the magnitude of R&D significantly associated with the magnitude of announcement effect.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
