The last straw? Why Nordic firms issue equity – Empirical evidence from the Nordic stock markets

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Journal Title

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Volume Title

School of Business | Master's thesis

Authors

Date

2024

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Finance

Language

en

Pages

47+5

Series

Abstract

This paper examines the determinants of seasoned equity offerings (SEOs) within the Nordic stock markets, assessing their alignment with prominent capital structure theories. Utilizing a dataset of 420 SEOs from 1,108 firms across 2010–2023, the analysis employs probit regressions to identify firm-specific ex-ante characteristics influencing the SEO decision, guided by trade-off, pecking order, and market timing theories. Furthermore, ex-post outcomes are analysed to evaluate consistency with theoretical predictions. The results reveal that capital demand, particularly proxied by capital expenditures and profitability, is the strongest predictor of SEOs, supporting the trade-off theory. Additionally, subsample analysis of firm age and analyst coverage indicate nuanced effects of information asymmetry. This thesis contributes to the literature by contextualizing capital structure theories within the Nordic region, offering novel insights into market dynamics and their implications for corporate finance strategies.

Description

Thesis advisor

Joenväärä, Juha

Keywords

osakeannit, pääomarakenne, pohjoismaiset osakemarkkinat, probit-regressio

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202501191377

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[gradu] Kauppakorkeakoulu / BIZ