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
Author(s) Warren, Katherine
Dimovski, WilliamORCID iD for Dimovski, William
Conference name Multinational Finance Society. Conference (16th : 2009 : Crete, Greece)
Conference location Crete, Greece
Conference dates 28 June - 1 July 2009
Title of proceedings Sixteenth annual conference multinational finance society : conference proceedings
Publication date 2009
Start page 59
End page 59
Total pages 1
Publisher Global Business Publications
Keyword(s) costs of raising capital
rights issues
equity capital
Summary 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.
Language eng
Field of Research 150299 Banking, Finance and Investment not elsewhere classified
Socio Economic Objective 900199 Financial Services not elsewhere classified
HERDC Research category E3 Extract of paper
HERDC collection year 2009
Copyright notice ©2009, Global Business Publications
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Document type: Conference Paper
Collections: Faculty of Business and Law
School of Management and Marketing
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Created: Thu, 06 Aug 2009, 14:54:19 EST by Lee-Ann Stones

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