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4. IPOs are associated with several puzzles: IPOs are underpriced on average; new issues are highly cyclical; transaction costs of IPOs are high and long-term

4. IPOs are associated with several puzzles: IPOs are underpriced on average; new issues are highly cyclical; transaction costs of IPOs are high and long-term performance of IPOs is poor on average. Why many firms are still choosing to go for an IPO (give at least three possible reasons supporting your answer)? Why investors choose to buy stocks of IPO firms?

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