Information Asymmetry, Mispricing, and Security Issuance

• 成果类型: Article
• 署名作者: Lee, Jiyoon
• 署名单位: Yonsei University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13066
• 发表日期: 2021
• 页码: 3401-3446
• 关键词: INSIDER TRADES; STOCK; decisions; earnings; FIRMS; announcements; performance; INVESTMENT; issues

摘要

I examine the effects of information asymmetry-driven mispricing on security issuance. Using predisclosure changes in purchase obligations as a proxy for information asymmetry-driven mispricing, I find that managers avoid (prefer) issuing securities when they perceive their firms to be undervalued (overvalued). The effects of information asymmetry-driven mispricing are stronger on equity issuance than debt issuance. Consequently, undervaluation (overvaluation) causes an increase (decrease) in leverage. These effects are more pronounced for firms, periods, and securities associated with greater information asymmetry. The stock-trading patterns that managers follow suggest that their perceived mispricing is an important factor in both private and firm-level decisions.