The costs of raising equity capital for closed-end fund IPOs

Dimovski, William, Brooks, Robert and Eekelen, Antonie 2007, The costs of raising equity capital for closed-end fund IPOs, Applied financial economics letters, vol. 3, no. 5, pp. 295-299.

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Title The costs of raising equity capital for closed-end fund IPOs
Author(s) Dimovski, William
Brooks, Robert
Eekelen, Antonie
Journal name Applied financial economics letters
Volume number 3
Issue number 5
Start page 295
End page 299
Publisher Routledge
Place of publication London, England
Publication date 2007-09
ISSN 1744-6546
1744-6554
Summary This article reports on some of the direct costs of raising equity capital by closed-end fund licensed investment company (LIC) initial public offerings (IPOs) in Australia from 1995 to 2005. The amount of underpricing by these IPOs is also identified. The average total direct costs amounted to a relatively low 3.4% of the capital raised, while fees paid to underwriters and/or stockbrokers was around 2.3%, to legal firms around 0.25% and to accounting firms around 0.07%. The average underpricing by these LIC IPOs was 1.3%. This article also confirms that the percentage total direct capital raising costs are inversely related to the size of the IPO and underwritten closed-end fund IPOs tend to have higher percentage total capital raising costs than those not underwritten.
Language eng
Field of Research 150201 Finance
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2007, Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30007064

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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