What does the term under-pricing refer to? If the average IPO is underpriced by about 15 percent,

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What does the term under-pricing refer to? If the average IPO is underpriced by about 15 percent, how could an unsophisticated investor, who regularly invests in IPOs, earn an average return less than 15 percent?

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Introduction to Corporate Finance

ISBN: 978-0324657937

2nd edition

Authors: Scott B. Smart, William L Megginson

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Question Posted: May 13, 2015 05:58 AM

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What does the term under-pricing refer to? If the average IPO is underpriced by about 15 percent,

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Underpricing refers to the fact that IPO shares typically rise on the fir...View the full answer

Introduction to Corporate Finance

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