Discuss why IPOs appear to generate abnormal returns for investors. Are these returns a sure thing? What

Question:

Discuss why IPOs appear to generate abnormal returns for investors. Are these returns a "sure thing"? What are the economic implications of these high returns for IPO issuers?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Investments

ISBN: 978-0132926171

3rd edition

Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey

See More Books

Question Posted: Mar 16, 2016 02:54 AM

See More Questions

England has almost completed the process of shifting from the inchpound system to the metric system. What effect do you think this will have on the traditional U.S. reluctance to make such a change?...
You have been asked to evaluate the economic implications of various methods for cooling condenser effluents from a 200-MW steam-electric plant. In this regard, cooling ponds and once-through cooling...
A. Describe some of the attributes of an ideal risk indicator for stock market investors. B. On the Internet, go to Yahoo! Finance (or msn Money) and download weekly price information over the past...
Suppose that we are at time 0 and the interest rate is 10% (d) What is the PV of an asset that pays 20 installments of $5 a year starting today?
At your schools fund- raising picnic, you pay for soft drinks with tickets purchased in advanceone ticket per bottle of soft drink. Tickets are available in sets of three types: Small: $3 for 3...
Concrete has exceptional strength in compression, but it fails rather easily in tension. Explain why.
$1,000 \mathrm{lb} / \mathrm{hr}$ of saturated water at $600 \mathrm{psia}$ is superheated to $650^{\circ} \mathrm{F}$ and expanded across a turbine to $200 \mathrm{psia}$ as illustrated in...
Charles Hart, an accounts payable clerk, is an hourly employee. He never works a minute past 5 PM unless the overtime has been approved. Charles has recently found himself faced with some severe...
We look at the detective novel market. Information gathered through a survey was used to Determine the following demand function and supply function: = 160-4 = 2-20 Graphically represent this console...
Caratini Company sells custom-made windows to Bryant Inc. for a new office building. The sale price for the windows is $275,000. Caratini requires customers to provide a down payment of 15% before it...
Why must companies that publicly issue securities file a prospectus with the SEC? What does the SEC's acceptance of the prospectus imply?
The empirical regularities cited in this chapter have potentially troubling implications for the capital asset pricing model and the concept of highly efficient markets. Discuss some of these...
The epidermis (epithelium of the cutaneous membrane or skin) is a keratinized stratified squamous epithelium. Explain why that epithelium is much better suited for protecting the body's external...
Explain how two of the health literacy assessments measure an individuals health literacy.
What role does personalized selling have in IMC?
What are the external vehicles employed by public relations?
Describe the four stages of communication competence. Explain the importance of mindfulness to communication competence.
Identify four of the most expensive medical conditions for employers.
Perform the indicated multiplications. A savings account of $1000 that earns r% annual interest, compounded quarterly, has a value of 1000(1 + 0.0025r) 2 after 6 months. Perform the indicated...
Which of the following streaming TV devices does not involve use of a remote controller? A) Google Chromecast B) Apple TV C) Amazon Fire TV D) Roku
There is a 30-year bond with a 9 percent coupon and a 6 percent yield to maturity. The bond is callable in 10 years at par value. What is the Macaulay duration of the bond assuming it is not called?...
Compute the bonds conversion value and market conversionprice. Convertible Bond Characteristics $1,000 Par value Annual coupon rate (annual pay) Conversion ratio Market price Stralght value 6.5% 105%...
Determine whether the value of a callable convertible bond will increase, decrease, or remain unchanged if there is an increase in stock price volatility. What if there is an increase in interest...
Multiplication of signed operands, which generate a double-length product in the 2's-complement 100 11 MULTIPLICAND (-13) 0 10 1 1 MULTIPLIER (+11) number system. The general strategy is the...
panel = Drawing Panel (160, 160) for i in range (0, 10): panel.draw rectangle (20, 20 + 100 10 * 1, 10 i, 10) Write variations of the above program that draw the figures at the lower right as output....
John estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -5,700 3 1 1,325 4 2 2,148 5 3 3,528 The required return for the project is 8%. What is the IRR for the project?

Discuss why IPOs appear to generate abnormal returns for investors. Are these returns a sure thing? What

Question:

Step by Step Answer:

It appears that underwriters often set a securitys offering price below the securi...View the full answer

Fundamentals of Investments

Students also viewed these Accounting questions