Why do Companies Include Warrants in Seasoned Equity Offerings: The case of French Unit Offerings.


We analyse the reasons why companies issue units when they raise additional capital. In contrast to previous evidence, our results show that units are not offered to mitigate the agency conflicts or to signal security mispricing as they are predominantly issued during cold periods, in public rather than in rights offerings, and when the issue is underwritten. In contrast, the results indicate that companies choose to offer units to circumvent the offer price regulation and to underprice their seasoned equity offering so as to minimise the issue cost and the risk of failure of the issue. These results provide support for the net proceeds maximization hypothesis.Warrants; Equity Issue; Flotation Method; Unit Offerings;

Similar works

Full text


Research Papers in Economics

Provided a free PDF
Last time updated on 7/6/2012View original full text link

This paper was published in Research Papers in Economics.

Having an issue?

Is data on this page outdated, violates copyrights or anything else? Report the problem now and we will take corresponding actions after reviewing your request.