Abstract This research is motivated by the role of equity issues in financing policy to leverage growth opportunities and the assets in place of firms in Indonesia post-COVID-19. The objective of this article is to analyze the differences in asymmetric information embedded in total assets and growth opportunities based on the firm's life cycle. The data collected consist of 126 firm observations from companies issuing equity for financing from 2020 to 2023. Firms issued more equity in 2021 (34.1%) and 2022 (34.1%) than 2020 (11.9%) and 2023 (19.8% of the 126 observations). The data were analyzed using three regression models: for all firms, for firms in the growth stage, and for firms in the maturity stage. This article presents varied results. The first and third models demonstrate that increases in total assets and growth opportunities reduce asymmetric information, which in turn leads to higher average funds raised through equity issuance. However, in the second model, an increase in the total assets of firms in the growth stage decreases asymmetric information, prompting firms to prefer equity issuance. In contrast, growth opportunities do not represent market-sensitive information and thus do not impact equity issuance. Notably, the mature stage model aligns more closely with the pecking order theory than the growth stage model.
Martono et al. (Wed,) studied this question.