Private benefits, Power index and Pricing: Evidence from Taiwanese Private Placements
This paper examines the relationship between private benefits and the discount of private equity offerings. Measuring private benefits in terms of both control rights and cash flow rights, we find that private benefits are primarily attributed to control right rather than ownership. By using a measure, the Banzhaf power index, that could better reflects the largest shareholders relative influence over the firm. We find that the largest shareholders control power decreases, even though her ownership increases after private placement. It indicates that the largest shareholder is willing to give up some control power in private placement. In addition, we find that motivation and the type of investors in private placements significantly influences price discount.
Private placement discount private benefits power index control right cash flow right
Tai Ma Ching Yi Yeh
Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan Department of Finance, Hsiuping Institute of Technology, Taichung, Taiwan
国际会议
广州
英文
1-28
2009-07-07（万方平台首次上网日期，不代表论文的发表时间）