Pre-emptive rights and rights issues under asymmetric information
Salomon Brothers Center for the Study of Financial Institutions, Graduate School of Business Administration, New York University, 1987 - Business & Economics - 28 pages
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Arbitrage asymmetric information Bank Bhagat choose status quo choose to retain Convertible Bonds Convertible Securities Corollary date t=2 Empirical Evidence empirical implications equity financing ex-ante expected payoff favorable firm Foreign Exchange Market Forthcoming in Journal framework future prospects G.A. Hawawini G.F. Udell given A7 Grammatikos Handa Hence high payoff hQg1 indicating good prospects infer insider shareholders Interest Rate investors irrespective issue an RO J.J. Merrick January Journal of Financial K.K. Lewis maintain status quo manager chooses manager's inside information managerial actions managers propose MaxQ message indicating mixed message negative stock price non-signalling equilibrium paper PENNSYLVANIA STATE UNIVERSITY positive NPV posterior probabilities PRAs prefer the signalling probability Published in Journal Q.E.D. Proof R.C. Stapleton raise equity Raviv received a mixed retain pre-emptive rights RIGHTS ISSUES rights offerings Risk Saunders September 1986 signalling equilibrium stock price reaction strictly prefer Swary total payoff underwritten public offerings unfavorable welfare function YORK UNIVERSITY