Eres : Digital Library : Works

Paper eres2011_35:
Wealth Effects on Unitholders following Property Company and A-REIT Rights Issues

id eres2011_35
authors Dimovski, Bill
year 2011
title Wealth Effects on Unitholders following Property Company and A-REIT Rights Issues
source 18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands
summary Over A$22 billion of new equity capital has been raised by way of rights issues by 71 Australian listed property entities (including A-REITs) during 2001 to 2009. While the rights offerings raise important equity capital for the issuers, this study investigates whether investors have profited from the rights offerings. The theoretical ex-rights share price is calculated for these issuers to find that on average subscribers have actually suffered a decrease in wealth. This study examines factors that might influence this percentage difference to the theoretical ex-rights share price following rights issue subscriptions. The findings suggest that issues that have a greater proportion that is underwritten and those with a higher risk profile offer a greater likelihood that investors will increase their wealth from the issue. There is some evidence also, regarding A-REITs, that larger discounts may reduce the likelihood of investors increasing their wealth from the issue.
keywords rights issues, equity capital, ex-rights share price
series ERES:conference
email wd@deakin.edu.au
content file.ppt (229,376 bytes)
discussion No discussions. Post discussion ...
ratings
session A1: Finance and Investment (I)
last changed 2011/06/23 16:27
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