Abstract
Financing decisions vany temporally and in cross-section, and are considered to reveal important information to market participants. The volume of seasoned equity offerings (SEOs) is not uniform over time and the existence of HOT (COLD) issue markets suggests the importance of “windows of opportunity” and “timing” to publicly listed firms. There has been some ambiguity as regards the relative importance of periods of equity overvaluation and macroeconomic conditions in driving SEO volumes and such empirical evidence as exists relates largely to US markets. We revisit this debate with specific reference to UK markets (1990-2002) and find that aggregate macroeconomic conditions largely drove SEO activity over the period. We uniquely identify the relevance offirms’ reputation for credible disclosure in equity financing decisions.
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