Underwriting of Australian Dividend Reinvestment Plans

Mathew Abraham (), James Lau () and Alastair Marsden ()
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Mathew Abraham: Department of Applied Business, Whitireia Polytechnic, New Zealand
James Lau: Department of Accounting and Corporate Governance, Macquarie University, Australia
Alastair Marsden: University of Auckland, New Zealand

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2019, vol. 22, issue 03, 1-26

Abstract: This study examines the decision to underwrite dividend reinvestment plans (DRPs) by Australian listed firms over the sample period 1995–2013. We find that the decision to underwrite a DRP for non-financial firms is negatively related to the level of franking credits attached to dividends, but positively related to the leverage of the firm and the discount for new shares issued in lieu of dividends. Non-financial and financial firms that are larger in size are more likely to underwrite their DRP. Lastly, underwriting of DRPs decreased with the onset of and subsequent to the height of the global financial crisis.

Keywords: Dividend reinvestment plans; underwriting; discount new shares (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S021909151950019X

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