Cash Saving and Equity Issue: SEOs and Private Placements

• Main Authors: Hsi-Wen Cheng, 鄭翖文
• Other Authors: 林宜勉
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/g5qq64

碩士 === 國立中興大學 === 會計學研究所 === 101 === This study primarily examines whether the relationship between cash saving and SEOs and Private placements can be explained by market timing theory or precautionary theory. Secondly, this study inspects the effect of corporate lifecycle theory on the financial decisions of firms. At last, this study tests the influence of audit quality on this cash saving phenomenon. The findings show that, on the market timing perspective, the coefficient between market timing proxy and cash saving is significant positive; however, the interaction term of SEOs or private and market timing proxy are significant, but not constant. As a result, we can only infer that market timing theory plays an important role in cash saving issue, but needs further research on it. On precautionary perspective, its proxy is significant related to cash saving, and the interaction term of SEOs and precautionary proxy are significant positive, while interaction term of private and precautionary proxy are not significant. It indicated that the cash saving effect on SEOs can be explained by precautionary motive theory, while the effect on private placements is not. The result of corporate lifecycle theory on the financial decisions of firms shows a significant positive relationship among SEOs and introduction stage and growth stage, indicated that there’s a higher chance that firms in introduction stage and growth stage issues SEO, while it shows significant negative coefficient on private side. We infer that the introduction stage of firm typically is high-risked and their financial information are less transparent, so they can’t find a steady partner to issue private placement on. At last, the coefficient between audit quality and cash saving is significant negative, indicated that high audit quality can constrain the effect of cash saving.