The calculation of returns during seasoned equity offers

The article analyses how the returns to a shareholder and the returns for an event study are calculated during the three types of seasoned equity offer (SEO) in use in the UK, namely rights issues, open offers and placings. The calculations differ across the two types of return and the three types of offer. Evidence from a sample of SEOs shows the large impact that the choice of calculation method has on returns. An unresolved question is whether to use discount-adjusted returns in event studies of placings.