Publication Type
Journal Article
Version
publishedVersion
Publication Date
8-1999
Abstract
Earnings forecast revisions by analysts subsequent to the announcement of private equity placements are examined. Results show that analysts make significant upward revisions to their forecasts for current-year earnings. Furthermore, these forecast revisions are significantly related to announcement-period abnormal returns, but not to the risk changes accompanying the equity placement. These findings are consistent with the information hypothesis, which suggests that private equity placements convey favorable information about future earnings.
Keywords
equity offerings, private placements, earnings forecast, information signalling
Discipline
Business | Corporate Finance | Portfolio and Security Analysis
Research Areas
Finance
Publication
Financial Review
Volume
34
Issue
3
First Page
19
Last Page
32
ISSN
0732-8516
Identifier
10.1111/j.1540-6288.1999.tb00460.x
Publisher
Wiley
Citation
GOH, Jeremy C.; Gombola, Michael; LEE, Hai Wei; and LIU, Feng Ying.
Private Placement of Common Equity and Earnings Expectations. (1999). Financial Review. 34, (3), 19-32.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/2201
Copyright Owner and License
Publisher
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/j.1540-6288.1999.tb00460.x