[Download] ~ Issuer-Oriented Underpricing, Share Marketability, And Share Value. # by International Journal of Business ~ eBook PDF Kindle ePub Free
eBook details
- Title: Issuer-Oriented Underpricing, Share Marketability, And Share Value.
- Author : International Journal of Business
- Release Date : January 01, 2002
- Genre: Industries & Professions,Books,Business & Personal Finance,
- Pages : * pages
- Size : 259 KB
Description
ABSTRACT Initial public offerings (IPOs) attract academic interest largely because of the price increase between the offering price and subsequent public market-trading price. The shareholder wealth loss ostensibly implied by this "underpricing" is a major reason this phenomenon is considered a financial anomaly. In this paper we argue that the traditional measure of underpricing, as well as those developed by Dawson and Barry are inadequate measures of shareholder wealth change, because they neglect an essential difference between the private and public marketplaces. This difference is the dramatically increased share marketability created when a firm becomes tradable in the public market. To better specify the wealth effects to issuing shareholders, we incorporate a marketability component into Barry's model. The resultant model is consistent with shareholder wealth maximization, the majority of empirical evidence on IPOs, and a growing body of financial theory literature.
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