Butler, Alexander W.; Grullon, Gustavo; Weston, James P. - In: Journal of Financial and Quantitative Analysis 40 (2005) 02, pp. 331-348
We show that stock market liquidity is an important determinant of the cost of raising external capital. Using a large sample of seasoned equity offerings, we find that, ceteris paribus, investment banks' fees are significantly lower for firms with more liquid stock. We estimate that the...