Private Placement of Common Equity and Earnings Expectations

Private Placement of Common Equity and Earnings Expectations

Earnings forecast revisions by analysts subsequent to the announcement of private equity placements are examined. Results show that analysts make significant upward revisions to their forecasts for current-year earnings. Furthermore, these forecast revisions are significantly related to announcement...

Full description

Saved in:
Bibliographic Details
Main Authors: GOH, Jeremy C., Gombola, Michael, LEE, Hai Wei, LIU, Feng Ying
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1999
Subjects:
equity offerings
private placements
earnings forecast
information signalling
Business
Corporate Finance
Portfolio and Security Analysis
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/2201
https://ink.library.smu.edu.sg/context/lkcsb_research/article/3200/viewcontent/j.1540_6288.1999.tb00460.x.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
Description
Summary:Earnings forecast revisions by analysts subsequent to the announcement of private equity placements are examined. Results show that analysts make significant upward revisions to their forecasts for current-year earnings. Furthermore, these forecast revisions are significantly related to announcement-period abnormal returns, but not to the risk changes accompanying the equity placement. These findings are consistent with the information hypothesis, which suggests that private equity placements convey favorable information about future earnings.

Similar Items