Der vereinfachte Bezugsrechtsausschluß — eine ökonomische Analyse

Stefan Rammert
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Stefan Rammert: Ludwig-Maximilians-Universität München

Schmalenbach Journal of Business Research, 1998, vol. 50, issue 7, 703-724

Abstract: Summary In Germany the rights issue is traditionally the most common method for issuing stock. Since 1994 German Joint stock corporations are allowed to issue stock through a cash offering if the issue price is not essentially below the stock price and the issue doesn’t exceed ten percent of the existing nominal capital. The intention of the legalization of the cash offering is to improve the flexibility of corporations’ financing policy and to lower their capital costs. In this article the effects of a cash offering on shareholder’s wealth are analysed in comparison to the traditional rights offering. The analysis is based on three criteria, protection against dilution of Stocks, incentive effects on the management’s investment and financing decisions and transaction costs. It is shown that most of the intended advantages of the cash offering have to be seen critically. Among other things inefficient investment and financing decisions can result from a cash offering. Further, the new regulations for stock issues may have a negative impact on the Position of minority shareholders.

Date: 1998
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DOI: 10.1007/BF03371529

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