TY - JOUR
T1 - External monitoring and its effect on seasoned common stock issues
AU - Slovin, Myron B.
AU - Sushka, Marie
AU - Hudson, Carl D.
PY - 1990/3
Y1 - 1990/3
N2 - This paper demonstrates that the market reaction to announcements of seasoned stock offerings varies with the presence of outside agents - accounting firms, commercial banks, and underwriters - who monitor the firm. The stock price reaction is a positive function of the quantity of bank debt in a firm's financial structure, the quality of the firm's investment banker, and the quality of the public accounting firm that serves as its external auditor. The evidence supports theoretical models that imply external agents audit, monitor, and certify decisions to issue seasoned common stock.
AB - This paper demonstrates that the market reaction to announcements of seasoned stock offerings varies with the presence of outside agents - accounting firms, commercial banks, and underwriters - who monitor the firm. The stock price reaction is a positive function of the quantity of bank debt in a firm's financial structure, the quality of the firm's investment banker, and the quality of the public accounting firm that serves as its external auditor. The evidence supports theoretical models that imply external agents audit, monitor, and certify decisions to issue seasoned common stock.
UR - http://www.scopus.com/inward/record.url?scp=38249019302&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=38249019302&partnerID=8YFLogxK
U2 - 10.1016/0165-4101(90)90023-W
DO - 10.1016/0165-4101(90)90023-W
M3 - Article
AN - SCOPUS:38249019302
SN - 0165-4101
VL - 12
SP - 397
EP - 417
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
IS - 4
ER -