Discretionary Accruals and Flotation Costs of Seasoned Equity Offerings: Evidence from Taiwan

• Main Authors: Hsin-YingLi, 李欣穎
• Other Authors: Ping-Hsun Huang
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/g2r8xe

碩士 === 國立成功大學 === 會計學系碩博士班 === 101 === This study investigates the relation between the floatation costs of seasoned equity offerings and accruals. My hypothesis is that higher accruals lead to negative market reaction and higher likelihood of SEO withdrawal. The study sample consists of 492 observations from Taiwan over a period from 2006 to 2010. The results indicate that while higher accruals are negatively related to announcement returns, they are positively related to the possibility of SEO withdrawal. The results support the hypotheses that higher accruals exacerbate asymmetric information and that asymmetric information results in negative announcement returns and higher possibility of SEO withdrawal. Thus, higher accruals heighten floatation costs.