| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5089904 | Journal of Banking & Finance | 2012 | 12 Pages |
Abstract
⺠We investigate how underwriters set the IPO firm's fair value. ⺠Multiples, dividend discount and discounted cash flow models are used. ⺠Underwriters apply a discount to fair value to set the preliminary offer price. ⺠This discount can be partially recovered by higher price update but not in full. ⺠The discount therefore contributes to IPO underpricing.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Peter Roosenboom,