Listing of a company in the securities exchange has been observed to be followed by underpricing first day and long term period underperformance terms pricing subsequent days. Consequently, there considerable curiosity from stakeholders, investors academics comprehend assessments why companies go public issues surrounding short long-run performance newly issued equities. Underpricing is necessa...

This paper proposes an integrated framework to address three empirical findings of the literature on initial public offerings. (i) Why do investment banks earn positive profits in a competitive market? (ii) Why do banks receive lower gross spreads in venture capitalist (VC) backed IPOs? (iii) Why is underpricing more pronounced in VC than in non-VC backed IPOs? We model the IPO procedure as a t...

We develop a dynamic nonlinear, noisy REE model of credit risk pricing under dispersed information that can theoretically and quantitatively account for the credit spread puzzle. The first contribution is a sharp analytical characterization of the dynamic REE equilibrium and its comparative statics. Second, we show that the nonlinearity of the bond payoff in the environment with dispersed infor...

We examine the impact of secondary market structure and liquidity on the cost of raising capital. In the 1990s trading on Nasdaq transformed from a dealer-oriented over-the-counter market to a market where investors could directly interact with each other. The Order Handling Rules (OHR) reforms that accomplished this were phased in across Nasdaq stocks over time allowing for identification of t...

We investigate whether climate change disclosures in initial public offering (IPO) prospectuses affect the information environment IPO market. find that are associated with lower underpricing. Further analyses reveal reputable underwriters and Securities Exchange Commission's Commission Guidance Regarding Disclosure Related to Climate Change enhance role of demonstrate firms more extensive prov...