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The Effect of Equity Issue Announcement on Large Cap, Mid Cap and Small Cap

Sidhu, Sukhlin Kaur LU and Mraovic, Aleksandra LU (2011) NEKK01 20111
Department of Economics
Abstract
Abstract

Title: The Effect of Equity Issue Announcement on Large Cap, Mid Cap and and Small Cap

Date: 2011-09-02

Authors: Aleksandra Mraovic and Sukhlin Kaur Sidhu

Advisor: Anne-Marie Pålsson

Level: Bachelor thesis, 15 credits

Theme: Department of Economics

Keywords: Event study, efficient market hypothesis, abnormal returns, equity issues, market capitalization, Stockholm Stock Exchange

Purpose: The main purpose of this study is to examine how announcement of equity issues affect companies within large cap, mid cap and small cap.

Method: The study is based on 28 companies listed on the Stockholm Stock Exchange, which announced seasoned equity offerings during the time frame of 2007-01-01 to 2011-06-01.... (More)
Abstract

Title: The Effect of Equity Issue Announcement on Large Cap, Mid Cap and and Small Cap

Date: 2011-09-02

Authors: Aleksandra Mraovic and Sukhlin Kaur Sidhu

Advisor: Anne-Marie Pålsson

Level: Bachelor thesis, 15 credits

Theme: Department of Economics

Keywords: Event study, efficient market hypothesis, abnormal returns, equity issues, market capitalization, Stockholm Stock Exchange

Purpose: The main purpose of this study is to examine how announcement of equity issues affect companies within large cap, mid cap and small cap.

Method: The study is based on 28 companies listed on the Stockholm Stock Exchange, which announced seasoned equity offerings during the time frame of 2007-01-01 to 2011-06-01. The companies studied are divided into three groups according to their market capitalization size: small cap, mid cap or large cap. The division enables us to observe any differences in reaction on stock prices upon the announcement. Since we want to see the impact an equity issue offering has on a stock price, an event study has been conducted. The data is collected from secondary sources through articles, literature and websites. Electronic websites as Avanza.se DI.se and Yahoo finance have been used to collect equity issue dates and stock prices.

Conclusion: Our study showed a decline in stock prices after an equity issue announcement within all three market capitalization groups. Support was found in previous research and relevant theories. A t-test helped us confirm that no semi-strong market efficiency exists among the three market capitalization groups. Large Cap, mid cap and small cap all show different progress after an equity issue announcement. (Less)
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author
Sidhu, Sukhlin Kaur LU and Mraovic, Aleksandra LU
supervisor
organization
course
NEKK01 20111
year
type
M2 - Bachelor Degree
subject
keywords
Event study, efficient market hypothesis, abnormal returns, equity issues, market capitalization
language
English
id
2167881
date added to LUP
2011-09-29 08:14:58
date last changed
2011-09-29 08:14:58
@misc{2167881,
  abstract     = {Abstract

Title:	The Effect of Equity Issue Announcement on Large Cap, Mid Cap and     and Small Cap

Date: 	 2011-09-02

Authors: Aleksandra Mraovic and Sukhlin Kaur Sidhu

Advisor: Anne-Marie Pålsson

Level: Bachelor thesis, 15 credits

Theme: Department of Economics

Keywords: Event study, efficient market hypothesis, abnormal returns, equity issues, market   capitalization, Stockholm Stock Exchange

Purpose: The main purpose of this study is to examine how announcement of equity issues affect companies within large cap, mid cap and small cap.

Method:	The study is based on 28 companies listed on the Stockholm Stock Exchange, which announced seasoned equity offerings during the time frame of 2007-01-01 to 2011-06-01. The companies studied are divided into three groups according to their market capitalization size: small cap, mid cap or large cap. The division enables us to observe any differences in reaction on stock prices upon the announcement. Since we want to see the impact an equity issue offering has on a stock price, an event study has been conducted. The data is collected from secondary sources through articles, literature and websites. Electronic websites as Avanza.se DI.se and Yahoo finance have been used to collect equity issue dates and stock prices.

Conclusion: Our study showed a decline in stock prices after an equity issue announcement within all three market capitalization groups. Support was found in previous research and relevant theories. A t-test helped us confirm that no semi-strong market efficiency exists among the three market capitalization groups. Large Cap, mid cap and small cap all show different progress after an equity issue announcement.},
  author       = {Sidhu, Sukhlin Kaur and Mraovic, Aleksandra},
  keyword      = {Event study,efficient market hypothesis,abnormal returns,equity issues,market capitalization},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Effect of Equity Issue Announcement on Large Cap, Mid Cap and Small Cap},
  year         = {2011},
}