Determinants of the underpricing of new shares during the subscription periodempirical evidence from the Spanish stock exchange

  1. Consuelo Riaño Gil 1
  2. Francisco Javier Ruiz Cabestre 1
  3. Rafael Santamaría Aquilué 2
  1. 1 Universidad de La Rioja
    info

    Universidad de La Rioja

    Logroño, España

    ROR https://ror.org/0553yr311

  2. 2 Universidad Pública de Navarra
    info

    Universidad Pública de Navarra

    Pamplona, España

    ROR https://ror.org/02z0cah89

Revista:
Applied financial economics

ISSN: 0960-3107

Año de publicación: 2007

Volumen: 17

Número: 7-9

Páginas: 521-540

Tipo: Artículo

DOI: 10.1080/09603100600706725 DIALNET GOOGLE SCHOLAR

Otras publicaciones en: Applied financial economics

Resumen

This article reports on an issue hitherto unexplored in the literature, namely, the 'new shares' price setting during the subscription period. We report evidence of a spread between the old stock price and the value of new shares obtained through subscription. A framework is developed within which to analyse the explanatory factors involved in this spread in the Spanish Stock Exchange. The empirical evidence suggests that new share prices during the subscription period are influenced by a range of factors, such as difference in the amount of tax to which subscription rights and capital gains are subject, characteristics of the issuer and the issue, norms established between clients and banks and the microstructure of the subscription rights market.

Fuente de los datos: Dialnet