Why do Companies Include Warrants in SeasonedEquity Offerings: The case of French Unit Offerings

Edith Ginglinger, Jean-François Gajewski () and Meziane Lasfer

Post-Print from HAL

Abstract: We analyze the reasons why companies issue units when they raise additional capital. We find that, incontrast to previous evidence, units are not offered to mitigate the agency conflicts or to signal securitymispricing as they are predominantly issued during cold periods, in public rather than in rights offerings, andwhen the issue is underwritten. In addition, the results indicate that companies choose to offer units to increasetheir offer price flexibility and to underprice their seasoned equity offering so as to minimize the issue cost and the risk of failure of the issue. These results provide support for the net proceeds maximization hypothesis.

Keywords: Equity issue; Flotation method; Unit offerings; Warrants (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

Published in European Financial Management Association, 2005, Milan, Italy

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00149205

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().