Ownership, regulation, information and the capital acquisition process
This study examines the seasoned equity issues of companies traded on the London Stock Exchange, in the context of regulatory changes that have allowed UK firms more discretion in choice of issue approach. This has led many firms to issue through placing in preference to a rights issue. We examine the choice of seasoned equity issuance method, focusing on the choice between placings versus rights issues and develop a model to explain the choice of equity issue method that achieves a high level of predictive accuracy. In particular, information that firms disclose around the issuance process has significant explanatory power for issue method choice.