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Why do Companies Include Warrants in Seasoned
Equity Offerings: The case of French Unit Offerings

Abstract : We analyze the reasons why companies issue units when they raise additional capital. We find that, in
contrast to previous evidence, units are not offered to mitigate the agency conflicts or to signal security
mispricing as they are predominantly issued during cold periods, in public rather than in rights offerings, and
when the issue is underwritten. In addition, the results indicate that companies choose to offer units to increase
their offer price flexibility and to underprice their seasoned equity offering so as to minimize the issue cost and the risk of failure of the issue. These results provide support for the net proceeds maximization hypothesis.
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https://halshs.archives-ouvertes.fr/halshs-00149205
Contributor : Edith Ginglinger <>
Submitted on : Thursday, May 24, 2007 - 5:26:08 PM
Last modification on : Wednesday, September 23, 2020 - 4:28:38 AM

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  • HAL Id : halshs-00149205, version 1

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Edith Ginglinger, Jean-François Gajewski, Meziane Lasfer. Why do Companies Include Warrants in Seasoned
Equity Offerings: The case of French Unit Offerings. European Financial Management Association, 2005, Milan, Italy. ⟨halshs-00149205⟩

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