Costs of raising equity capital by renounceable rights issues in Australia
Warren, Katherine and Dimovski, William 2009, Costs of raising equity capital by renounceable rights issues in Australia, in Sixteenth annual conference multinational finance society : conference proceedings, Global Business Publications,, pp. 59-59.
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Title
Costs of raising equity capital by renounceable rights issues in Australia
Rights issues remain a common method for raising equity capital in Australia for companies listed on me Australian Stock Exchange. This study investigates the capital raising costs of Anstralian renounceable equity rights issues from 2001 to 2006. Both direct and indirect costs are investigated and the explanatory power of potential influencing factors is analyzed. The total direct costs averaged nearly 4% of gross proceeds raised and the mean offer price was discounted around 17% from the current market price. Issue size, percentage underwritten, concentration of ownership and issuer risk significantly influence the percentage direct costs of the rights issue. The age of the issuer, the average historical volume of shares traded and the offer price appear to influence the percentage discount.
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eng
Field of Research
150299 Banking, Finance and Investment not elsewhere classified
Socio Economic Objective
900199 Financial Services not elsewhere classified
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