What is meant by underpricing? Why are most IPOs underpriced? Drawing on the academic evidence, explain the

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What is meant by underpricing? Why are most IPOs underpriced?

Drawing on the academic evidence, explain the main theories behind this phenomenon. Is this is a sign of market inefficiency? Explain.

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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Question Posted: Feb 22, 2024 03:03 AM

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What is meant by underpricing? Why are most IPOs underpriced? Drawing on the academic evidence, explain the

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Answer Underpricing in IPOs Underpricing in Initial Public Offerings IPOs refers to the situation where the market price of the newly issued shares is higher than the offering price set by the company ...View the full answer

Corporate Finance

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