Koop, G.M. and Li, K. (2001) The valuation of IPO and SEO firms. Journal of Empirical Finance, 8 (4). pp. 375-401. ISSN 0927-5398
Full text not available in this repository. (Request a copy from the Strathclyde author)Abstract
We examine the pricing of initial public offering (IPO) and seasoned equity offering (SEO) firms using a stochastic frontier methodology. The stochastic frontier framework models the difference between the maximum possible value of the firm and its actual market capitalization at the time of the offering as a function of observable firm characteristics. Using a new data set, we find that commonly used pricing factors do indeed influence valuation. Ceteris paribus, firms in industries with great earnings potential are more highly valued, and IPO firms are underpriced. Theories regarding underwriter reputation or windows of opportunity for equity issuance are not supported in our empirical results.
| Item type: | Article |
|---|---|
| ID code: | 6942 |
| Keywords: | misvaluation, underpricing, stochastic frontier, bayesian inference, gibbs sampling, statistics, Commerce, Economic Theory, Statistics |
| Subjects: | Social Sciences > Commerce Social Sciences > Economic Theory Social Sciences > Statistics |
| Department: | Strathclyde Business School > Economics |
| Related URLs: | |
| Depositing user: | Strathprints Administrator |
| Date Deposited: | 03 Oct 2008 |
| Last modified: | 12 Mar 2012 10:46 |
| URI: | http://strathprints.strath.ac.uk/id/eprint/6942 |
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