Underwriting of Australian dividend reinvestment plans

Mathew Abraham*, James Lau, Alastair Marsden

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This study examines the decision to underwrite dividend reinvestment plans (DRPs) by Australian listed firms over the sample period 1995-2013. We find that the decision to underwrite a DRP for non-financial firms is negatively related to the level of franking credits attached to dividends, but positively related to the leverage of the firm and the discount for new shares issued in lieu of dividends. Non-financial and financial firms that are larger in size are more likely to underwrite their DRP. Lastly, underwriting of DRPs decreased with the onset of and subsequent to the height of the global financial crisis.

Original languageEnglish
Article number1950019
Pages (from-to)1-26
Number of pages26
JournalReview of Pacific Basin Financial Markets and Policies
Volume22
Issue number3
DOIs
Publication statusPublished - Sep 2019

Keywords

  • discount new shares
  • Dividend reinvestment plans
  • underwriting

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