caa a22 4500 463187512 CHVBK 20180406164858.0 cr unu---uuuuu 170326e20070801xx s 000 0 eng 10.1007/s11156-007-0030-2 doi (NATIONALLICENCE)springer-10.1007/s11156-007-0030-2 Underwriter warrants, underwriter reputation, and growth signaling [Elektronische Daten] [Sung Bae, Hoje Jo] We present an alternative explanation of warrant use for underwriter compensation. We consider underwriter warrants as a signaling device to convey an issuing firm's future growth potential and test this signaling role of warrant use by taking a direct approach in a seasoned equity offering (SEO) environment. Employing a matched-sample approach, we find that the use of warrants mitigates the negative price effects of SEOs. Specifically, the issuance of SEOs with warrant-based compensation has a significantly less negative impact on abnormal return performance than the issuance of SEOs with cash-based compensation. The results of logit regressions confirm this linkage. We further find that this less negative impact on firm value is attributable to the signaling value representing the issuing firm's future growth prospects through warrant compensation even in the presence of underwriter reputation variables. These results suggest that firms with greater growth prospects benefit more by issuing SEOs with warrant compensation than with cash compensation. Overall, our results support the growth signaling effect of warrant compensation as an additional role of underwriter warrants in the SEO market. Springer Science+Business Media, LLC, 2007 Underwriter warrants nationallicence Underwriter reputation nationallicence Growth signaling nationallicence Seasoned equity offerings nationallicence Bae Sung Department of Finance, College of Business Administration, Bowling Green State University, 43403, Bowling Green, OH, USA aut Jo Hoje Department of Finance, Leavey School of Business, Santa Clara University, 95053, Santa Clara, CA, USA aut Review of Quantitative Finance and Accounting Springer US; http://www.springer-ny.com 29/2(2007-08-01), 129-154 0924-865X 29:2<129 2007 29 11156 https://doi.org/10.1007/s11156-007-0030-2 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11156-007-0030-2 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Bae Sung Department of Finance, College of Business Administration, Bowling Green State University, 43403, Bowling Green, OH, USA aut NATIONALLICENCE 700 1- Jo Hoje Department of Finance, Leavey School of Business, Santa Clara University, 95053, Santa Clara, CA, USA aut NATIONALLICENCE 773 0- Review of Quantitative Finance and Accounting Springer US; http://www.springer-ny.com 29/2(2007-08-01), 129-154 0924-865X 29:2<129 2007 29 11156 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer