A Research on the Relationship between Seasoned Equity Offering and Operating Performance

• Main Authors: Chen, Jian-Wei, 陳建偉
• Other Authors: Wang Kuh-Luh
• Format: Others
• Language: zh-TW
• Published: 1998
• Online Access: http://ndltd.ncl.edu.tw/handle/59640551257705030351

碩士 === 國立交通大學 === 管理科學研究所 === 86 === A Research on the Relationship between Seasoned Equity Offering and Operating Performancestudent:Jian-Wei Chen Advisor:Kuh-Luh WangInstitute of Management ScienceNational Chiao Tung UniversityAbstract Public companies conduct seasoned equity offering(SEO) in order to improve their financial structure, enlarge productivity capability or even to diversify their products. Due to the special structure in Taiwan*s stock market that majority investors are individuals, it has shown various phenomenon which is different from foreign stock market. This evidence includes short-time emphasis benefit , lack of correct knowledge in finance and preference in risky adventure. The research emphasizes the cash flow and earnings aspects to explore the long term effect of seasoned equity offering. The conclusions are: (1) The operating performance of companies is decline after SEO, and the result is consistent with Jensen*s Free Cash Flow hypothesis. (2) Because of high financial pressure , operating performance of high leveraged companies is better than lower-ones. (3) Debt ratio and tax are the main considerations when companies conduct SEO in electronic and information industries. (4) Companies with small size and high-growth opportunities scale have higher probability to conduct SEO.