The efficiency of the South African market for rights issues: an application of the Black-Scholes model

Capital market efficiency is an important aspect of modern financial theory. This is because in an efficient capital market, scarce resources are optimally allocated to productive investments in a way that is beneficial to market participants. Yet there appears to be a dearth of research into the market efficiency of rights issues in South Africa, despite the fact that the majority of equity issues on the JSE are via a rights issue. The problem is that if the market is inefficient it is failing in its role of being an efficient allocator of scarce resources. The objective of this study is to establish whether the South African market for rights issues is efficient.

Grantor dc:publisher.institution

Department of Finance and Tax

Year dc:date.issued

1996

Author dc:creator

• Alston, Rowan Gilbert

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/14414

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/14414