TY  - JOUR
AU  - Scholes,Myron S.
AU  - Wolfson,Mark A.
TI  - Decentralized Investment Banking:  The Case of Discount Dividend-Reinve stment and Stock-Purchase Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3093
PY  - 1989
Y2  - September 1989
UR  - http://www.nber.org/papers/w3093
L1  - http://www.nber.org/papers/w3093.pdf
N1  - Author contact info:
Myron S. Scholes
34 Stern Lane
Atherton, CA  94027
Tel: 650/234-0521
Fax: 650/234-0525
E-Mail: mscholes@pgamlp.com

Mark A. Wolfson
Graduate School of Business
Stanford University
Stanford, CA  94305-5015
Tel: 650/234-0505
Fax: 650/234-0525
E-Mail: wolfson_mark@gsb.stanford.edu
M2  - featured in NBER digest on 1990-01-01
AB  - Discount dividend-reinvestment and stock-purchase plans allow shareholders to capture part of the underwriting fees incurred in new stock offerings and save sponsoring firms some of the usual underwriting costs. We tested the degree to which individual investors can profitably serve this investment banking function by implementing simple investment/trading strategies designed to capture the discounts and distribute the shares in the market. The large profits earned by our strategies raise serious questions about why it takes firms so long to raise the target level of capital and why many eligible shareholders do not participate in these discount plans.
ER  -