Voluntary disclosure, information asymmetry, and insider selling through secondary equity offerings / Discussion

The relation of voluntary disclosure of management earnings forecasts and information asymmetry to insider selling through secondary equity offerings is examined. It is hypothesized that the pattern of voluntary disclosure and level of information asymmetry prior to secondary equity offerings differ...

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Bibliographic Details
Published inContemporary accounting research Vol. 15; no. 4; p. 505
Main Authors Marquardt, Carol A, Wiedman, Christine I, Welker, Michael
Format Journal Article
LanguageEnglish
Published Toronto Canadian Academic Accounting Association 01.12.1998
Subjects
Accounting theory
Asymmetry
Correlation analysis
Disclosure
Earnings forecasting
Equity
Inscriptions
Insider trading
Secondary markets
Studies
Variables
United States > US
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Summary:The relation of voluntary disclosure of management earnings forecasts and information asymmetry to insider selling through secondary equity offerings is examined. It is hypothesized that the pattern of voluntary disclosure and level of information asymmetry prior to secondary equity offerings differs systematically based on the identity of the seller. A greater frequency of voluntary disclosure and decreased level of information asymmetry is predicted when managers sell their stock through a secondary offering. The findings provide evidence that managers act as if reduced information asymmetry correlates with a reduced cost of capital. A discussion of the article is also presented.
ISSN:0823-9150
1911-3846