Equity Issuance Methods and Dilution

Abstract We analyze rights and public offerings when informed shareholders strategically choose to subscribe. Absent wealth constraints, achieve the full information outcome dominate offerings. When some are constrained, lead more dilution of their stakes lower payoffs, despite income from selling these rights. In both offerings, there is a trade-off between investment efficiency transfers among shareholders. firms can flotation method, either all same offer method or high low types opt for while intermediate select (JEL G32)