Which of the reasons for the existence of IPO underpricing are correct: To help...
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Which of the reasons for the existence of IPO underpricing are correct:
- To help allocate the market price premium in the Goodwill account.
- To help attract average investors who are otherwise unwilling to participate, as they know that on average they would earn a negative return due to the 'winner's curse.'
- To help the underwriters take care of their customers who quoted well calculated valuations during the road show for the order book.
- To reduce the SEC filings and to reduce the updates to the Prospectus.
- The owners of the firm going through an IPO want the shares of their firms to be underpriced.
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