Year: 1986
Author: Kruschwitz, Lutz
Credit and Capital Markets – Kredit und Kapital, Vol. 19 (1986), Iss. 1 : pp. 110–121
Abstract
Rights Issues from the Standpoint of Option Price Theory
Rights issues serve to protect old shareholders against asset losses. The amount of such an asset loss, i.e., the value of the subscription right, comprises in the traditional view the difference between the price of the old share and the “mixed price”. However, the idea of the mixed prices is tenable only if it is assumed that the rights will be definitely exercised by those who acquire them. Hence the classical rights formula is based on the assumption that the placing of new shares involves no risks or at least is possible regardless of the issuing price. In this context, also take-over transactions between issuers and underwriting banks have no raison d’ötre. This article sets out to overcome the weaknesses of the traditional viewpoint with the help of option-price approaches. The analysis leads to the conclusion that even on perfect capital markets and under homogeneous expectations the issue prices of new shares are not irrelevant
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/ccm.19.1.110
Credit and Capital Markets – Kredit und Kapital, Vol. 19 (1986), Iss. 1 : pp. 110–121
Published online: 1986-01
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 12
Author Details
-
Emissionspreis und Bezugsrechtswert bei Aktienemissionen
Zimmermann, Heinz
Credit and Capital Markets – Kredit und Kapital, Vol. 20 (1987), Iss. 2 P.236
https://doi.org/10.3790/ccm.20.2.236 [Citations: 0]
-
Black, Fischer und Myron Scholes: The Pricing of Options and Corporate Liabilities. Journal of Political Economy 81 (1973), S. 637 – 654.
Google Scholar -
Brealey, Richard und Stewart C. Myers: Principles of Corporate Finance. New York 1981.
Google Scholar -
Cox, John C. und Mark Rubinstein: Options Markets. Englewood Cliffs, N.J. 1985.
Google Scholar -
Hagenmüller, K. F. und G. Diepen: Der Bankbetrieb. 9. Aufl., Wiesbaden 1982.
Google Scholar -
Kruschwitz, Lutz und Rainer Schöbel: Eine Einführung in die Optionspreistheorie. Das Wirtschaftsstudium 13 (1984), S. 68 – 72, 116 – 121, 171 – 176.
Google Scholar -
Levy, Haim und Marshall Sarnat: Risk, Dividend Policy, and the Optimal Pricing of a Rights Offering. A Comment. Journal of Money, Credit and Banking 3 (1971), S. 840 – 849.
Google Scholar -
Merton, Robert C.: Theory of Rational Option Pricing. Bell Journal of Economics and Management Science 4 (1973), S.141 – 183.
Google Scholar -
Schmidt, Reinhard H.: Grundzüge der Investitionsund Finanzierungstheorie. Wiesbaden 1983.
Google Scholar -
Schneider, Dieter: Investition und Finanzierung. Lehrbuch der Investitions-, Finanzierungs- und Ungewißheitstheorie. 5. Aufl., Wiesbaden 1980.
Google Scholar -
Smith, Clifford W., jr.: Option Pricing: A Review. Journal of Financial Economics 3 (1976), S.3-51.
Google Scholar -
Smith, Clifford W., jr.: Alternative Methods for Raising Capital. Rights versus Underwritten Offerings. Journal of Financial Economics 5 (1977), S. 273 – 307.
Google Scholar -
Süchting, Joachim: Theorie und Politik der Unternehmensfinanzierung. 4. Aufl., Wiesbaden 1984.
Google Scholar -
Van Horne, James C.: Financial Management and Policy. 6th edition, Englewood Cliffs, N.J. 1983.
Google Scholar