Journal of Finance Vol. 37 No. 3 1982
Direct Equity Financing: A Resolution of a Paradox
Abstract
When raising new equity capital managers have historically rejected the direct offer method favoring instead the seemingly more expensive underwritten public issue. This paper provides a resolution for this equity financing paradox by demonstrating empirically that firms which engage in direct offers enjoy a comparative cost advantage that is more than sufficient to account for the absolute reported cost differences between the two methods of equity financing.
- DOI
- 10.1111/j.1540-6261.1982.tb02215.x
- Volume
- 37
- Issue
- 3
- Pages
- 651-665
- Language
- en
- Sources
- openalex crossref