Impact of Sarbanes-Oxley Act on Seasoned Equity Offerings by Canadian Cross-Listed Firms: Evidence from Bought Deals vs. Firm Commitment
This paper examines the impact of the Sarbanes-Oxley Act on the market reaction and underwriting fees of two methods of choice for underwriting seasoned equity offerings: Bought deals and firm commitment, by Canadian firms cross-listed on major U.S. exchanges. After controlling for offer and firm characteristics, it finds the market reaction to offer announcements is more positive for bought deals than for firm commitment during the pre-Sarbanes period only. This shows that bought deals lost their indirect cost advantage after the passage of the Act. On the other hand, the underwriting fees are lower for bought deals than for firm commitment during the pre-Sarbanes period only. This shows that bought deals also lost their fees cost advantage after the passage of the Act.
Year of publication: |
2015
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Authors: | Rubalcava, Atturo |
Published in: |
The International Journal of Business and Finance Research. - Vol. 9.2015, 1, p. 63-71
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Subject: | Sarbanes-Oxley Act | Seasoned Equity Offerings | Cross-Listed | Market Reaction | Underwriting Fees | Bought Deals | Firm Commitment |
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