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- Title
ON SHAREHOLDERS' INDIFFERENCE TO THE PROCEEDS PRICE IN PREEMPTIVE RIGHTS OFFERINGS.
- Authors
Wakoff, Gary I.
- Abstract
The article discusses shareholders' indifference to the proceeds price in preemptive rights offerings. The author states that that shareholder is indifferent to the proceeds price that is chosen in a preemptive rights offering of equity capital if the total sum of capital raised is fixed. The author explains that a firm will distribute to shareholders based on each share held and allow them to exchange a set amount of rights and dollars for one new share. The article provides several equations to help illustrate the study.
- Subjects
STOCKHOLDERS; VALUATION of corporations; ARBITRAGE; MARKET value; STOCK prices; FINANCE; RIGHTS offerings
- Publication
Journal of Financial & Quantitative Analysis, 1973, Vol 8, Issue 5, p835
- ISSN
0022-1090
- Publication type
Article
- DOI
10.2307/2329986