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Seasoned Equity Offerings or Capital Deductions? The Reaction of Stock Prices: Evidence from Taiwan

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  • Suduan Chen

Abstract

This study explores the influence of the announcement of seasoned equity offerings (SEOs) and capital deductions on stock prices by listed and OTC companies on the Taiwan Stock Market. It applies the event study to examine stock price fluctuations and estimates the regression coefficient of the market model with generalized autoregressive conditional heteroscedasticity (GARCH) models. The empirical results show that despite different implications of SEOs and capital deductions, there is a positive and significant influence on average abnormal returns rate and average cumulative abnormal returns rate on stock prices during the short term, medium term, and the long term.

Suggested Citation

  • Suduan Chen, 2017. "Seasoned Equity Offerings or Capital Deductions? The Reaction of Stock Prices: Evidence from Taiwan," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(3), pages 644-660, March.
    • Handle: RePEc:mes:emfitr:v:53:y:2017:i:3:p:644-660
    DOI: 10.1080/1540496X.2015.1097991
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    Cited by:

    1. Min-Yuh Day & Paoyu Huang & Yirung Cheng & Yensen Ni, 2023. "Investing Strategies for Trading Stocks as Overreaction Triggered by Technical Trading Rules with Big Data Concerns," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 148-161, October.
    2. Prasad, Mason & Bakry, Walid & Varua, Maria Estela, 2021. "Abnormal volatility in seasoned equity offerings during economic disruptions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).

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