FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

It is well known that most IPOs have extraordinary return on the first day of trading but under perform the general market in the next

It is well known that most IPOs have extraordinary return on the first day of trading but under perform the general market in the next 5 years. Why do issuers intentionally under price their shares at beginning? And why do you think IPOs under perform in the long term?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Managerial Finance

Essentials Of Managerial Finance

Authors: Scott Besley, Eugene F. Brigham

12th Edition

0030258723, 9780030258725

More Books

Students also viewed these Finance questions

Question

★★★★★
Current Liabilities The following items represent liabilities on a firms balance sheet: a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed. b. An...

Answered: 1 week ago

Question

★★★★★
1. Operating cycle [LO 18.1] What are some of the characteristics of a firm with a long operating cycle?

Answered: 1 week ago

Question

★★★★★
The probability that an African American person in the United States has type O+ blood is 47%. Six unrelated African American people in the United States are selected at random. (a) Find the...

Answered: 1 week ago

Question

★★★★★
It is well known that most IPOs have extraordinary return on the first day of trading but under perform the general market in the next 5 years. Why do issuers intentionally under price their shares...

Answered: 1 week ago

Question

★★★★★
Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck...

Answered: 1 week ago

Question

★★★★★
Below what IQ does .85 of the population fall if the mean is 100 with a standard deviation of 15? (Don't round off the IQ score.)

Answered: 1 week ago

Question

★★★★★
SproUTS Bank is about to take part in a syndicated loan that will require SproUTS bank to lend $20million as a business loan. Risk weights remain unchanged for the new business loan. SproUTS Bank...

Answered: 1 week ago

Question

★★★★★
The following frequency distribution shows the selling price of 500 ml of bubble tea of all the vendors in Kepong area. Selling price (RM) 4- Answered: 1 week ago

Answered: 1 week ago

Question

★★★★★
Needing to compare my new files Recursive.java which contains the details of creating the 4 methods as specified above: int sum_sqr_rec(stack stk),(15 points) int plus_minus_rec(stack stk), (15...

Answered: 1 week ago

Question

★★★★★
The hottest set top box available is made by Set Top Box International. Right now, they outsell both BestBuy and Target in terms of sales. Inventory, however, is a problem for Set Top Box...

Answered: 1 week ago

Previous Question Next Question