IS THERE A WINDOW OF OPPORTUNITY FOR SEASONED EQUITY ISSUANCE

The aggregate Volume of equity issues is used to search for periods wh en seasoned equity capital can be raised at favorable terms. We find t hat the price reaction to equity issue announcements in high equity is sue volume (HOT) periods is approximately 200 basis points lower on av erage than in low equity issue volume (COLD) periods. The lower price reaction in hot markets is economically important and is independent o f the macroeconomic characteristics of hot and cold markets. The evide nce supports the existence of windows of opportunity for equity issues that result at least partially from reduced levels of asymmetric info rmation.