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“Why has IPO underpricing changed over time?” The authors give three possible explanations for IPO underpricing....

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Finance

“Why has IPO underpricing changed over time?” The authors givethree possible explanations for IPO underpricing. Which one do youfind most plausible, and why? Look at the paper(s) that supportthat theory and cite some of the results that support yourassertion that this is the best IPO underpricing theory of thethree.

(PLEASE MAKE IT A SEVERAL SENTENCE ANSWER)

Answer & Explanation Solved by verified expert
4.0 Ratings (652 Votes)
Underpricing of IPO Underpricing is the practice of listing an initial public offering IPO at a price below its real value in the stock market When a new stock closes its first day of trading above the set IPO price the stock is considered to have been underpriced Underpricing is shortlived because investor demand will drive the    See Answer
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