Below is the market reaction in term of the change of stock price to different

activities adopted by firms. For example, the stock price decreases on average 3% when a

firm announces a seasoned equity offering; the stock price increases on average 5% when

a firm announces stock repurchase.

Issuing seasoned equity -3% reaction on average

Issuing public bonds 0% reaction on average

Issuing bank loans +2% reaction on average

Announcing stock repurchase +5% reaction on average

Can you provide rational explanation on these phenomena using corporate finance theories