A free cash flow explanation for the wealth effect of seasoned equity offerings

Hei Wai Lee
June 1998
American Business Review;Jun98, Vol. 16 Issue 2, p100
Academic Journal
Examines the roles of growth opportunities and free cash flow in explaining the negative stock market reaction to seasoned equity offering announcements. Overvaluation hypothesis of Myers and Majluf; Definition of free cash flow; Implementation of a comprehensive test to the fee cash flow hypothesis with two levels of analysis.


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