What is it about?
This research investigates the market reaction to both “unsweetened” (plain) and “sweetened” (with simultaneous distribution of bonus issues) rights offerings in the Istanbul Stock Exchange. Consistent with previous U.K. and U.S. evidence, although with larger magnitude, the announcement day abnormal returns for “unsweetened” rights offerings are negative and significant, suggesting that such issues convey unfavourable information.
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Why is it important?
Rights offerings convey unfavourable information to the market and corporations in Borsa Istanbul bundle rights offerings with stock dividends (Bonus issues) to lessen the unfavourable information effect.
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This page is a summary of: Market reaction to “unsweetened” and “sweetened” rights offerings in an emerging European stock market, Journal of Multinational Financial Management, July 2006, Elsevier,
DOI: 10.1016/j.mulfin.2005.07.001.
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