The optimal spread and offering price for underwritten securities

• 成果类型: Article
• 署名作者: Yeoman, JC
• 署名单位: University System of Georgia; North Georgia College & State University; University System of Georgia; Georgia State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(01)00076-9
• 发表日期: 2001
• 页码: 169-198
• 关键词: underwriting spread; offering price; net proceeds; investment bank

摘要

The paper develops the net proceeds maximization theory explaining how the spread and offering price are determined in all underwritten offerings in the U.S. The theory yields solutions for the optimal spread and offering price for all underwritten securities and it yields comparative statics that explain the cross-sectional variation in actual spreads and initial returns across different types of underwritten securities. The theory also suggests two alternative explanations to the ones offered by Chen and Ritter (J. Finance 55 (2000) 1105) for the clustering of unseasoned equity offerings spreads at 7%. (C) 2001 Published by Elsevier Science S.A.