Showing papers on "Market capitalization published in 1979"

Equity Rights Issues and the Efficiency of the UK Stock Market

Abstract: IN THE UK, as in most other European countries, quoted companies raise virtually all their new equity capital via the rights issue method.' In recent years, some ?1 to ?1.5 billion has been raised in this way each year on the London Stock Exchange, serving to indicate the importance of equity rights issues as a topic in corporate finance. This paper describes an empirical study of UK rights issues, involving various tests of semi-strong form market efficiency with respect to the announcement of rights issues. In addition, the Price Pressure Hypothesis, which asserts that equity issues, by increasing the supply of shares, temporarily depress the share price, is tested against the competing Substitution Hypothesis. Since this involves estimating the demand curve for a company's shares, our results provide evidence not only on market efficiency but also on market liquidity, and whether companies can raise new equity at existing market prices. The study is also of methodological interest in that it uses a number of alternative models for testing market efficiency, thus allowing us to test the sensitivity of our conclusions to the particular methodology employed. This is also one of the first studies to use the new London Share Price Database (LSPD), which is the first comprehensive source of UK share returns data to become available for research purposes.

An assessment of risk in thinner markets: the Belgian case

Abstract: This study uses the Market Model to assess the risk of securities in a thinner stock market, the Brussels Stock Exchange (Belgium) and compares the results to similar findings in French and U.S. stock exchanges.