Abstract

The objective of the current research paper is the investigating the effect of capital raising plans on the cumulative return and the purchase (sale) pressure on the days around the assembly. By raising capital in the present study, financial outsourcing from the shareholders’ receivables of the dividend (stock precedence right) and conversion of accumulated earnings to new shares (authorized profit) with the purpose of fixed investment and development is intended. Corresponding to the assumption, the price pressure of distributing new shares brings about an increase in the supply side as a result of which the return on stock and transaction turnover are influenced. The study was carried out on 100 companies, each having increased their investments three times during the years from 2003 to 2014. To do so, utilizing the panel data [1] and stratified random sampling, the information from the sample companies were gathered and organized. To analyze the data, OLS regression mode and two-way t-test were applied. The results of the study based on OLS regression indicated that the capital gain does not exert a negative and significant effect on the two-day (the day before and the day after the assembly) cumulative return. Furthermore, the t-test indicated that the capital raising plan has not had a significant effect on the purchase (sale) pressure on the days around the assembly, so the price pressure assumption cannot be confirmed.