Increasing capital through subscription and capitalization and their impact on common stock prices

An applied study in the Iraq Stock Exchange

Authors

  • Salah Hassan Ahmad College of Administration and Economics, University of Human Development, Sulaymaniyah, Kurdistan Region, Iraq.

DOI:

https://doi.org/10.21928/juhd.v3n2y2017.pp580-603

Abstract

The aim of research is to study Capital increase Through the issuance of new common stock (IPO) , And through the stock dividend And the study impact of Capital increase on the stock prices In the stock market . Problem of the research represented in extent impact of Capital increase on the stock prices in the Iraq stock Exchange ? 

to achieve this objective has been tested three main hypotheses, the first hypothesis that " There are significant impact of Capital increase Through the issuance of new common stock on the stock prices for the surveyed companies " . The second hypothesis is that " There are significant impact of  Capital increase Through the stock dividend on the stock prices for the surveyed companies " . Third hypothesis that that " The impact of the capital increase through the stock dividend  greater than the impact of the capital increase through the issuance of new stock on the stock prices for the surveyed companies " .

To test the hypotheses of the research Data were analyzed using statistical program (SPSS) and using (T-Test) , The research sample included 13 companies Listed in the Iraq Stock Exchange , During the period from November 2013 until June 2015 , 6 companies increased their capital through issuance of new common stock (IPO) , While 6 companies increased their capital through stock dividend , The research has reached into number of conclusions, The most important that the Test results showed presence the impact of Capital increase Through the issuance of new common stock on the stock prices for the surveyed companies , This corresponds with the first main hypothesis .

Also the Test results showed presence the impact of Capital increase Through the stock dividend on the stock prices for the surveyed companies, This corresponds with the second main hypothesis . Also the Test results showed the impact of the capital increase through the stock dividend not  greater than the impact of the capital increase through the issuance of new stock on the stock prices for the surveyed companies , This not corresponds with the Third main hypothesis .The Researcher was presented a set of recommendations, the most important that companies management must try not to over-reliance In funding to increase capital through the issuance of new stock (IPO) Because Investors are regarded as bad news about the financial situation of the company is reflected negatively on the wealth of the owners .

References

أولاً: التقارير والنشرات
1-التقارير اليومية الصادرة عن سوق العراق للاوراق المالية إبتداءً من تشرين الثاني 2013 ولغاية حزيران 2015 .
ثانياً: الكتب
1-حداد، فايز سليم ، " الادارة المالية " ، ط3 ، دار الحامد للنشر والتوزيع، (2010) ، عمان، الاردن ، 317-318 .
2-العامري، محمد علي ابراهيم، " الادارة المالية المتقدمة " ، ط1 ، اثراء للنشر والتوزيع، (2010)، عمان، الاردن ، 253-439 .
3-مطاوع، سعد عبد الحميد، " الادارة المالية – مدخل حديث "، ط1، المكتبة العصرية ،(2010) ، مصر ، 519-521
.
English reference Books-
1-Atrill, Peter ," Financial Management" ,5th Edition ,Prentice Hall , (2009) , 278 .
2-Fabozzi,Frank j. Peterson,Pamela p. , " Financial Management and analysis " ,Second Edition,John Wiley&Sons,Inc., (2003) , 542 .
3-Gitman, Lawrence J. , "Principles of Managerial Finance" ,10th Edition, (2003) , 309-314 .
4-Ross,Stephen A. Westerfield,Randolph W. Jordan,Bradford D. ,"Essentials Of Corporate Finance " ,Third Edition, McGraw-Hill,Irwin , (2001) , 411-423 .
5-Ross,Stephen A. Westerfield,Randolph W. Jaffe,Jeffrey ,"Corporate Finance " 6th Edition,McGraw-Hill,Irwin , (2002) , 537 .
6-Sherman,Andrew J. ,"RAISING CAPITAL" ,Second Edition, AMACOM , (2005) , 192-203 .
7-Walther,Larry M. Skousen,Christopher J. , " Liabilities and Equity " , (2009) , 71-72 .

Published

2017-06-30

Issue

Section

Articles