| Title: | How economic policy uncertainty affects the cost of raising equity capital : evidence from seasoned equity offerings | Authors: | Chan, YC Saffar, W Wei, KCJ |
Issue Date: | Apr-2021 | Source: | Journal of financial stability, Apr. 2021, v. 53, 100841 | Abstract: | Economic policy uncertainty (EPU) increases the cost of raising equity capital, especially when the economy is weak. A one standard deviation increase in the EPU index developed by Baker, Bloom, and Davis (2016) is associated with a 43 basis point increase in the price discount of seasoned equity offerings (SEOs) during the 2000−2014 period. The cross-sectional analysis shows that the EPU effect on SEO discounts is stronger for firms with greater dependence on government spending, less informative stock price, or a smaller EPU beta. Moreover, there are fewer SEO activities in periods when there is a high degree of policy uncertainty. | Keywords: | Economic policy uncertainty Seasoned equity offerings SEO discounts |
Publisher: | Elsevier | Journal: | Journal of financial stability | ISSN: | 1572-3089 | EISSN: | 1878-0962 | DOI: | 10.1016/j.jfs.2020.100841 |
| Appears in Collections: | Journal/Magazine Article |
Access
View full-text via PolyU eLinks 
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.