The influence of Market Timing and the lifecycle stage in carry out equity public offering

Vilma Sousa Ismael Da Costa, Márcio André Veras Machado

Abstract


This study aimed to determine, by logistic regression, if the occurrence of market timing and the lifecycle stage influence the decision to carry out an equity public offering in Brazilian companies. The analysis focuses on whether the probability of a company making an equity public offering is negatively related to the BM index, future returns, number of years of life and size. The sample was composed by non-financial companies with stock traded on BMFBovespa. As main results, can be concluded that there is a inverse relationship between probability of equity public offering and the lifecycle stage. On the other hand, there were no evidence confirming the relationship between the BM index and the decision to carry out a equity public offering, as required by the market timing theory. Finally, no evidence was found that companies take advantage of market opportunities to issue stocks. However, evidence was found that the majority of equity public offerings was carried out by young and small companies.




DOI: https://doi.org/10.5902/198346599853


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Revista de Administração da UFSM. Brazilian Journal of Management

Universidade Federal de Santa Maria, Santa Maria, Rio Grande do Sul, Brasil, eISSN 1983-4659