SECONDARY EQUITY OFFERINGS: THE CASE OF INSTALLMENTS RECEIPTS

Abstract

This paper examines secondary equity offerings that were done in the Canadian markets through “installment receipts” (IRs). Previous studies on seasoned equity offerings tend to focus on the price reaction around the announcement date. We extend the analysis to cover a longer period so that the issues of liquidity effect and information asymmetry can be adequately addressed. We also offer evidence to indicate that the use of IRs in secondary offerings can reduce the liquidity impact in markets where market depth is not as substantial as in the U.S.

Citation

Charupat, N. and Cheung, C.S. (2005), "SECONDARY EQUITY OFFERINGS: THE CASE OF INSTALLMENTS RECEIPTS", Research in Finance (Research in Finance, Vol. 21), Emerald Group Publishing Limited, Leeds, pp. 113-133. https://doi.org/10.1016/S0196-3821(04)21005-X