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New public stock issues by seasoned and unseasoned firms: A comparative analysis in a turbulent environment—the case of israel
Author(s) -
Barniv Ran,
Bulmash Samuel B.
Publication year - 1988
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090090103
Subject(s) - leverage (statistics) , business , capital structure , operating leverage , equity (law) , stock (firearms) , finance , financial structure , monetary economics , financial system , economics , profitability index , mechanical engineering , debt , machine learning , computer science , political science , law , engineering
This study presents and examines new evidence on the relationship between financial structure and ownership in New and Veteran Public firms (sometimes known as unseasoned or seasoned firms, respectively). The major findings are: (1) the cost of capital and the cost of equity increased with financial leverage, but at a different magnitude in new and veteran public firms reflecting different risk conceptions; and (2) management and administration costs for new public firms are indicated to be higher than for veteran public firms. Reasons for and implications of these findings are subsequently discussed.