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| Tekijä: | Booth, J. R. Chua, L. |
| Otsikko: | Ownership dispersion, costly information , and IPO underpricing |
| Lehti: | Journal of Financial Economics
1996 : JUN, VOL. 41:2, p. 291-310 |
| Asiasana: | COMPANY OWNERSHIP INFORMATION LIQUIDITY |
| Kieli: | eng |
| Tiivistelmä: | We develop an explanation for IPO underpricing in which the issuer's demand for ownership dispersion creates an incentive to underprice. Promoting oversubscription allows broad initial ownership, which in turn increases secondary-market liquidity. Increased liquidity reduces the required return to investors. Broad initial ownership, however, requires an increase in investor-borne information costs. These information costs are offset through initial underpricing. Empirical results are consistent with initial underpricing reflecting the level of ownership dispersion. |
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