How does under-pricing add to the cost of going public?
Answer to relevant QuestionsWhat happens to a company’s stock price when the firm announces plans for a seasoned equity offering? What are the long- term returns to investors, following an SEO? In what key ways do share issue privatizations (SIPs) differ from private- sector share offerings? Why do you think governments deliberately under-price SIPs? Distinguish between an equity carve-out and a spin-off. How might a spin-off create value for share-holders? What is a recapitalization? Why is this considered a pure capital structure change? What are the important direct and indirect costs of bankruptcy? Which of these, do you think, are the most important for discouraging maximum debt use by corporate managers?
Post your question