An empirical analysis of secondary equity offering in France from 2005 to 2013

Abstract

The long-term performance of seasoned equity offerings has been widely examined in studies. This paper will focus on France stock market long-term performance through the liquidity characteristics and cumulative excess returns from 2005 to 2013. The purpose of the empirical study is to investigate whether seasoned equity offering (SEO) have significant effect on the liquidity and abnormal return of the stocks as well as the company’s fundamental performance. The study tries to reveal the long-term potential profitability of France SEO investment. The empirical result indicates that a relationship between the liquidity index and the cumulative excess return compared to the return on capital. The high coefficient of liquidity indicates the significant impact of SEO on stock trading.