Financial Management
Опубликовано на портале: 16-06-2006
Kee H. Chung, Mingsheng Li, Linda Yu
Financial Management.
2005.
Vol. 34.
No. 3.
P. 65-88.
We consider a simple model positing that initial public offering price is equal to
the present value of an entity's assets in place and growth opportunities. The model
predicts that initial return is positively related to both the size and risk of growth
opportunities. Consistent with this prediction, we find initial return to be positively
related to both the fraction of the offer price that is accounted for by the present
value of growth opportunities and various proxies of issue uncertainty. We also find
that IPO investors equate one dollar of growth opportunities to approximately three
quarters of tangible assets.
