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- Title
SEASONED EQUITY OFFERINGS: RIGHTS ISSUE VERSUS UNDERWRITTEN COMMITMENT : THE U.S. ECONOMY IN PERSPECTIVE.
- Authors
Cox, Raymond A. K.; Aryal, Ram C.
- Abstract
Capital is constantly being raised in the market to fund firm's expansion, acquisitions, and other strategies. Equity financing for established corporations comes primarily from additions to retained earnings. However, selling new common stock is an option. The issuance of additional shares can be executed by a choice between a rights offering or an underwritten commitment. For firms that have the preemptive right the rights method is obligatory. The remainder of firms, that do not have the preemptive right in their by-laws, have complete liberty to select either of the two methods to raise equity money.
- Subjects
UNITED States; CAPITAL; STOCKS (Finance); STOCKHOLDERS equity; CORPORATE profits; CONSUMPTION (Economics); SAVINGS; WEALTH; SUPPLY-side economics; RIGHTS offerings
- Publication
Journal of Financial Management & Analysis, 2007, Vol 20, Issue 2, p56
- ISSN
0970-4205
- Publication type
Article