Leverage, Growth Opportunities and Stock Price Response to New Financing

摘要

This paper examines the impact of leverage and growth opportunities on stock price reactions to seasoned equity offerings in Finland. The empirical results provide novel evidence of a negative relationship between leverage and stock price decline associated with equity offerings. In addition, the results indicate that growth opportunity is positively related to announcement abnormal return. Furthermore, we examine the effect of leverage and growth opportunities on equity offerings. It is found that high-levered low–growth firms are the worst performers at the announcement and issuance of seasoned equity offerings.