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Author Jegadeesh, Narasimhan ♦ Weinstein, Mark ♦ Welch, Ivo
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Ipo Return ♦ Subsequent Uity Offering ♦ Empirical Investigation ♦ Market-feedback Hypothesis ♦ Initial Public Offering ♦ Equity Offering ♦ Economic Significance ♦ Subsequent Seasoned Offering ♦ Several Recent R ♦ Seasoned Equity ♦ Ipo Underpricing ♦ Favorable Price ♦ Additional Test ♦ Positive Relation ♦ Signaling Hypothesis
Abstract Several recent p~@rs present signaling models in which firms underprice their initial public offerings of equity (IPOs) so that they can subsequently issue seasoned equity at more favorable prices. We test the implications of these models. We find a positive relation between IPO underpricing and the probability and size of subsequent seasoned offerings. Although these results are consistent with the implications of the signaling hypotheses, the economic significance appears weak. We conduct additional tests to evaluate other explanations for these findings and find the alternatives more compelling. Key words: IPO underpricing; Market-feedback hypothesis; Seasoned equity offering; Signaling hypothesis
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Publisher Date 1991-01-01