Seasoned Securities

A security that has been traded long enough to establish a positive reputation for liquidity and trade volume. Seasoned securities tend to have stable prices and meet with success on the secondary market.

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We examine the relationship between the degree of informational asymmetry surrounding a firm and the equity market's reaction to a firm's announcement to sell seasoned securities. We use the adverse-selection component of the bid--ask spread as a proxy for the informational asymmetry of a firm.

Information conveyed by seasoned security offerings: evidence from components of the bid--ask spread

The fact that the perpetuity model does better in pricing new issues than seasoned securities may reflect a more accurate estimation of k used in Equation (1).

Pricing new-issue and seasoned preferred stocks: a comparison of valuation models

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