Firm Size and the Information Contents of Over-the-Counter Common Stock Offerings
نویسندگان
چکیده
We examine the announcement period stock returns for 179 over-the-counter (OTC) firms that issue common stock to reduce nonconvertible debt. We find that small OTC firms experience returns that are significantly more negative than large OTC firms. Regression tests reveal that firm size is a significant factor in accounting for stock returns. Other tests establish firm size as a dominant effect. Our support for a firm size effect is consistent with a differential information effect given that firm size is positively related to the amount of information available about firms.
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