Economics at your fingertips  

Arbitrage Opportunities and Event Impacts On Spanish Increase Capitals

Manuel Verdú Henares, Óscar Carchano Alcina and José Emilio Farinós Vinas
Additional contact information
Manuel Verdú Henares: University of Valencia
Óscar Carchano Alcina: University of Valencia
José Emilio Farinós Vinas: University of Valencia

from University of Primorska Press

Abstract: In capital increases in which pre-emptive subscription rights are issued, there are two ways of acquiring the company's shares: either by buying them directly on the market, or by subscribing to the new shares using the subscription rights. This could lead to the existence of arbitrage opportunities. In addition, the announcement of these processes incorporates very relevant information to the market, which could generate abnormal returns for the shares. This paper analyses both hypotheses simultaneously on the same sample and concludes that there are indeed arbitrage opportunities and also abnormal returns can be detected. Furthermore, it is also concluded that these effects are especially significant in companies with low liquidity or for which short positions in the market are not allowed.

Keywords: seasoned equity offering with rights; abnormal returns; opportunity of arbitrage; Spanish stock market (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this chapter

More chapters in MIC 2020: The 20th Management International Conference from University of Primorska Press
Bibliographic data for series maintained by Alen Jezovnik ().

Page updated 2021-07-13
Handle: RePEc:prp:micp20:9-23