The price reaction on the actual issue day should be about zero, because the share sale is
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The price reaction on the actual issue day should be about zero, because the share sale is an event that was announced earlier and thus should have been almost perfectly anticipated. If the market did not use this information efficiently, and the share price were to go down on the day of the offering, you could short the equity shares the day before the offering, and repurchase them the day after the offering for a profit.
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