Accelerated Equity Offers: The Role of Internal and External Certification Mechanisms

39 Pages Posted: 4 Nov 2013 Last revised: 31 Jan 2014

See all articles by Hardjo Koerniadi

Hardjo Koerniadi

Auckland University of Technology

Chandrasekhar Krishnamurti

University of South Australia

Sie Ting Lau

Nanyang Technological University (NTU) - Division of Banking & Finance

Alireza Tourani-Rad

Auckland University of Technology - Faculty of Business & Law

Yang Ting

Auckland University of Technology

Multiple version iconThere are 2 versions of this paper

Date Written: October 31, 2013

Abstract

We examine the role of internal and external certification mechanisms in the issuance choice of SEOs between accelerated offers and fully marketed offers. Our empirical work supports the view that a firm’s internal corporate governance structure and audit fee are associated with the issuance choice between accelerated and fully marketed offers. Furthermore, we find that after controlling for the self-selection problem, firms paying higher audit fee incur lower flotation costs as measured by gross spreads. Finally, we find a significant positive association between audit fee and the net proceeds raised in SEOs.

Keywords: accelerated offers, seasoned equity, flotation costs, information asymmetry, due diligence

JEL Classification: G14, G24, G32

Suggested Citation

Koerniadi, Hardjo and Krishnamurti, Chandrasekhar and Lau, Sie Ting and Tourani-Rad, Alireza and Ting, Yang, Accelerated Equity Offers: The Role of Internal and External Certification Mechanisms (October 31, 2013). 2014 Financial Markets & Corporate Governance Conference, Available at SSRN: https://ssrn.com/abstract=2347947 or http://dx.doi.org/10.2139/ssrn.2347947

Hardjo Koerniadi

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

Chandrasekhar Krishnamurti (Contact Author)

University of South Australia ( email )

37-44 North Terrace, City West Campus
Adelaide, South Australia 5001
Australia

Sie Ting Lau

Nanyang Technological University (NTU) - Division of Banking & Finance ( email )

S3-B1B-76 Nanyang Avenue
Singapore, 639798
Singapore
65 790 6051 (Phone)
65 791 3697 (Fax)

Alireza Tourani-Rad

Auckland University of Technology - Faculty of Business & Law ( email )

3 Wakefield Street
Private Bag 92006
Auckland Central 1020
New Zealand

Yang Ting

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
31
Abstract Views
877
PlumX Metrics