Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CF > 04 Lecture > Flashcards

04 Lecture Flashcards

1
Q

What are the four phenomena of IPOs

A
  1. Underpricing
  2. Number of issues is cyclical
  3. Cost pf IPOs are very high
  4. Poor long-run post-IPO performance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Possible explanations for underpricing

A
  1. Signaling
  2. Winners Curse
  3. Institutional aspects of allotment
  4. Insurance against legal liabilities
  5. Strategic Ownership
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Signaling?

A

Lemon market problem

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is Winners Curse?

A

Protection against getting issue exactly when being overoptimistic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are Institutional aspects of allotment?

A
  • Revealing demand at bookbuilding will increase
  • UP is compensting for info reveal
  • Only partial explination for …
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Insurance against legal liabilities?

A
  • Up reduces probability of issuer beeing sued

- Disputed because UP also outside US

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is Strategic Ownership?-

A
  • UP creates oversubscription allowing strategic allotment to specific shareholders
  • Institutions provide monitoring, small investors provide liquidity
How well did you know this?
1
Not at all
2
3
4
5
Perfectly

CF (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions