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The Discount Dilemma: The Announcement Effects of Seasoned Equity Offerings on the Short-Run Performance of South African-listed Firms

El Zarif, Aya LU and Eckleton, Craig (2022) NEKN02 20221
Department of Economics
Abstract
The rationale behind the SEO and the correct pricing are of utmost importance to the success of the SEO, the share price performance, and any subsequent corporate projects the firm wishes to undertake. The primary objective of this research paper is to investigate how the share price of South African-listed firms is affected by the management team’s decision to announce the intention to undertake an SEO during the 2000 – 2022 period. To do so, we conducted an event study and found that the level of discounting and other firm-specific characteristics does can explain SEOs underperformance. We found that the negative price reaction post SEO announcement holds for South African firms. We also found that firm-specific and SEO-specific... (More)
The rationale behind the SEO and the correct pricing are of utmost importance to the success of the SEO, the share price performance, and any subsequent corporate projects the firm wishes to undertake. The primary objective of this research paper is to investigate how the share price of South African-listed firms is affected by the management team’s decision to announce the intention to undertake an SEO during the 2000 – 2022 period. To do so, we conducted an event study and found that the level of discounting and other firm-specific characteristics does can explain SEOs underperformance. We found that the negative price reaction post SEO announcement holds for South African firms. We also found that firm-specific and SEO-specific characteristics have a more powerful effect on SEO’s performance than the level of discounting. (Less)
Please use this url to cite or link to this publication:
author
El Zarif, Aya LU and Eckleton, Craig
supervisor
organization
course
NEKN02 20221
year
type
H1 - Master's Degree (One Year)
subject
keywords
Event Study, Seasoned Equity Offering, Cumulative Abnormal Returns, South Africa, Discount Rate
language
English
id
9087435
date added to LUP
2022-10-10 09:34:02
date last changed
2022-10-10 09:34:02
@misc{9087435,
  abstract     = {{The rationale behind the SEO and the correct pricing are of utmost importance to the success of the SEO, the share price performance, and any subsequent corporate projects the firm wishes to undertake. The primary objective of this research paper is to investigate how the share price of South African-listed firms is affected by the management team’s decision to announce the intention to undertake an SEO during the 2000 – 2022 period. To do so, we conducted an event study and found that the level of discounting and other firm-specific characteristics does can explain SEOs underperformance. We found that the negative price reaction post SEO announcement holds for South African firms. We also found that firm-specific and SEO-specific characteristics have a more powerful effect on SEO’s performance than the level of discounting.}},
  author       = {{El Zarif, Aya and Eckleton, Craig}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Discount Dilemma: The Announcement Effects of Seasoned Equity Offerings on the Short-Run Performance of South African-listed Firms}},
  year         = {{2022}},
}