From 1999 to 2017, the average IPO rose by 18.4% in its first day of trading. In
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From 1999 to 2017, the average IPO rose by 18.4% in its first day of trading. In 1999, 117 deals doubled in price on the first day. What factors might contribute to the huge first-day returns on IPOs? Some critics of the current IPO system claim that underwriters may knowingly underprice an issue. Why might they do this? Why might issuing companies accept lower IPO prices? What impact do institutional investors have on IPO pricing?
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Ans 1 The important factors which might contribute huge returns on day1 of IPO is the buzz that is b...View the full answer
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Related Book For 
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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