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Underpricing and actual return in IPOs

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Title: Underpricing and actual return in IPOs
Other Titles: Underpricing and actual return in IPOs
Authors: Lundberg, Gustav
Nagy, Leon
Issue Date: 18-Aug-2017
Degree: Student essay
Series/Report no.: 201708:181
Abstract: In IPOs, both the firm and its underwriter might have incentives to underprice the shares. This has caused a perception that investing in IPOs is an easy way to achieve abnormal returns. According to an article published by Kevin Rock however, investors should not expect abnormal returns when subscribing for shares in IPOs after adjusting for expected rationing. He refers it to a winner’s- curse problem where investors gets full allocation in overpriced IPOs and limited allocation in underpriced... more
Appears in Collections:Kandidatuppsatser i finansiell ekonomi



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