The Use of Stand Alone Warrants as Unique Capital Raising Instruments

28 Pages Posted: 22 Jun 2004

See all articles by Jo-Ann Suchard

Jo-Ann Suchard

Financial Research Network (FIRN); UNSW Business School

Abstract

This study documents a significant positive announcement effect for a unique capital raising tool, stand alone warrants, in the Australian market. The result is consistent with the models of Schultz (1993) and Mayers (1998) where a warrant is viewed positively by the market. The results of the model developed to analyse the determinants of the announcement effect, support variants of the information asymmetry hypothesis (proxied by major shareholder pre-commitment and issue size).

Keywords: Rights issues, warrant issues, announcement effect

JEL Classification: G14, G32

Suggested Citation

Suchard, Jo-Ann and Suchard, Jo-Ann, The Use of Stand Alone Warrants as Unique Capital Raising Instruments. Journal of Banking and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=557212

Jo-Ann Suchard (Contact Author)

UNSW Business School ( email )

high street
High St
sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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