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Does liquidity risk explain low firm performance following seasoned equity offerings?

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Does liquidity risk explain low firm performance following seasoned equity offerings? / Bilinski, Pawel; Strong, Norman; Liu, Weimin.

Lancaster : Lancaster University, 2011.

Research output: Working paper

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Bilinski, Pawel ; Strong, Norman ; Liu, Weimin. / Does liquidity risk explain low firm performance following seasoned equity offerings?. Lancaster : Lancaster University, 2011.

Bibtex

@techreport{45476e56cc454e239f311b0a709ae27c,
title = "Does liquidity risk explain low firm performance following seasoned equity offerings?",
abstract = "By making seasoned equity offerings (SEO), firms can improve the liquidity of their shares and lower their costs of capital. This paper examines whether SEO firms achieve such a liquidity gain and explores the role of liquidity risk in explaining their long-run performance. Consistent with predictions, SEO firms experience significant post-issue improvements in liquidity and reductions in liquidity risk. Size and book-to-market matching fails to control for these liquidity effects, generating the low long-term post-SEO performance documented in the literature. SEO firms show normal long-term performance after adjusting for liquidity risk.",
author = "Pawel Bilinski and Norman Strong and Weimin Liu",
year = "2011",
language = "English",
publisher = "Lancaster University",
type = "WorkingPaper",
institution = "Lancaster University",

}

RIS

TY - UNPB

T1 - Does liquidity risk explain low firm performance following seasoned equity offerings?

AU - Bilinski, Pawel

AU - Strong, Norman

AU - Liu, Weimin

PY - 2011

Y1 - 2011

N2 - By making seasoned equity offerings (SEO), firms can improve the liquidity of their shares and lower their costs of capital. This paper examines whether SEO firms achieve such a liquidity gain and explores the role of liquidity risk in explaining their long-run performance. Consistent with predictions, SEO firms experience significant post-issue improvements in liquidity and reductions in liquidity risk. Size and book-to-market matching fails to control for these liquidity effects, generating the low long-term post-SEO performance documented in the literature. SEO firms show normal long-term performance after adjusting for liquidity risk.

AB - By making seasoned equity offerings (SEO), firms can improve the liquidity of their shares and lower their costs of capital. This paper examines whether SEO firms achieve such a liquidity gain and explores the role of liquidity risk in explaining their long-run performance. Consistent with predictions, SEO firms experience significant post-issue improvements in liquidity and reductions in liquidity risk. Size and book-to-market matching fails to control for these liquidity effects, generating the low long-term post-SEO performance documented in the literature. SEO firms show normal long-term performance after adjusting for liquidity risk.

M3 - Working paper

BT - Does liquidity risk explain low firm performance following seasoned equity offerings?

PB - Lancaster University

CY - Lancaster

ER -