Determinants of Contract Choice: The Use of Warrants to Compensate Underwriters of Seasoned Equity Issues
合同选择的决定因素:以认股权证支付增发承销报酬
ABSTRACT The issuer's decision to include warrants as compensation to underwriters is studied for a sample of 1,991 negotiated firm commitment issues of seasoned equity. Using a two‐stage logit model to correct for self‐selection bias, we find direct evidence that warrant compensation functions as a bond, substituting for reputational capital and enabling the underwriter to certify the issue price. To a lesser degree, the decision also is affected by regulations on…