Motivation and Performance of Seasoned Offerings by Closed-End Funds.
We examine the motivation and performance of closed-end funds that engage in seasoned public or rights offerings. We find that closed-end funds are more motivated to engage in seasoned offerings when their shares exhibit a relatively high premium (compared to their corresponding NAV) and have a high degree of liquidity. We also find a significant negative valuation effect on average in response to seasoned offerings by closed-end funds. Our cross-sectional analysis reveals that the valuation effect at the time of the seasoned offering is more unfavorable for funds that have relatively high expense ratios and are relatively large. Furthermore, we find that the closed-end funds experience significant negative valuation effects over the three-year period subsequent to the seasoned offering, implying poor post-offering performance. Copyright 2001 by MIT Press.
Year of publication: |
2001
|
---|---|
Authors: | Akhigbe, Aigbe ; Madura, Jeff |
Published in: |
The Financial Review. - Eastern Finance Association - EFA. - Vol. 36.2001, 3, p. 101-22
|
Publisher: |
Eastern Finance Association - EFA |
Saved in:
Saved in favorites
Similar items by person
-
Industry signals relayed by corporate earnings restatements
Akhigbe, Aigbe O., (2008)
-
Partial anticipation and the gains to bank merger targets
Akhigbe, Aigbe O., (2004)
-
Accounting contagion : the case of Enron
Akhigbe, Aigbe O., (2005)
- More ...