Financial Accounting and Equity Markets

Does Market Misvaluation Help Explain Share Market Long-Run Underperformance Following a Seasoned Equity Issue?

Philip Brown^a, Gerry Gallery^b, Olivia Goei^c

^a Schools of Accounting and Banking & Finance, University of New South Wales, Sydney, 2052, Australia and UWABusiness School, University of Western Australia, Crawley, 6009, Australia

^b School of Accounting, Queensland University of Technology, Brisbane, 4000, Australia

^c PT. Cargo International Logistics, Jakarta, Indonesia

Abstract

We examine the relation between pre-seasoned equity offering (SEO) announcement date misvaluation and long-run post-SEO performance for a large sample of Australian SEOs made between 1993 and 2001. Our study is motivated by inconsistent findings across countries ...