| The main purpose of this paper is to investigates the impact of corporate external
financing announcements on stock prices. The average abnormal return (AAR) and cumulative average abnormal return (CAAR) measures are applied for the tock-prices analysis.
The important findings are as followed:
1. The announcement of a cash-offered seasoned common stock issue has a significantly positive information effect. That is, common stockholders earn significantly positive abnormal returns at the day of announcement. In contrast, the announcement of a new convertible bond issue shows no significant abnormal returns around the announcement date.
2. For the impact of corporate financing announcement8 on stock prices, the evidence that we found in this paper, is inconsistent with that expected by the pecking order theory.
3. The cash-offerred seasoned issues announced during different periods have different impacts on sh80re prices. And also, there are significantly different impacts for issues with different fund-raising purposes and with different degrees of dilution on equity.