Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 6) evidence on ipo underpricing is provided in sev

6) Evidence on IPO underpricing is provided in several empirical studies, including a seminal paper by...

50.1K

Verified Solution

Question

Finance

6) Evidence on IPO underpricing is provided in several empiricalstudies, including a seminal paper by Loughran and Ritter (2004).7) On average, IPOs traded at a premium and one reason can beunderpricing of IPO at the offer time. Briefly discuss whether thisresult is consistent with previous empirical studies (Loughran andRitter (2004)about IPO traded at premium if they were underpricedat offer time.

Answer & Explanation Solved by verified expert
4.3 Ratings (810 Votes)
Ans The purpose of this study is to provide empirical evidence for the phenomenon of underpricing of Initial Public Offerings On the basis of sample IPOs from the NYSE and NASDAQ exchanges the underpricing of stock IPOs is found to still be prevalent after the information technology bubble petered out in the early 21st century A model has been developed to analyze the accuracy of a number of theories put forward to explain this underpricing some which have not been the object of a comprehensive investigation yet The results indicate that underpricing can in part be explained by the informational asymmetry between the underwriters issuing firms and investors Furthermore IPO underpricing is found to exhibit mild cyclicality and seasonality and variations across economic sectors Finally this study    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

6) Evidence on IPO underpricing is provided in several empiricalstudies, including a seminal paper by Loughran and Ritter (2004).7) On average, IPOs traded at a premium and one reason can beunderpricing of IPO at the offer time. Briefly discuss whether thisresult is consistent with previous empirical studies (Loughran andRitter (2004)about IPO traded at premium if they were underpricedat offer time.

Other questions asked by students

Q

Determine the volume of the solid of revolution generated by rotating around the axis; x=9 the...

Basic Math
Q

When creating a treatment plan in Radiation Therapy! What occurs In a plan with the hot...

Physics
Q

A 0.300-kg puck, initially at rest on a horizontal, frictionless surface, is struck by a 0.200-kg...

Physics
Q

A laguerre equation is any differential equation of the form xy"+(1-x)y'+ny=0 where n is an integer....

Advance Math
Q

Complete the congruence statement K 20 km 13 km 18 km O 13 km 18...

Geometry
Q

Name 1 Tell whether the given point is a solution y 2x 3 6 0...

Algebra
Q

Hattie has recently inherited 6700 which she wants to deposit into a CD account She...

Algebra
Q

I need help with my accounting cybertex project

Accounting
Q

cost accounting

Accounting
Q

QUESTION ONE (20 marks) The auditors operational standards states that The auditor should obtain relevant...

Accounting
Q

Entries for issuing bonds and amortizing discount by straight-line method On the first day of...

Accounting
Q

If the interest rate is 5% compounded annually, which one of the following has a...

Finance