Which of the following is NOT one of the four characteristics of IPOs that puzzle financial economists? Select one: a. The long-run performance of a newly public company (three to five years from the date of issue) is superior to the overall market return. b. On average, IPOs appear to be underpriced. c. Total costs of the IPO are very high, and it is unclear why firms willingly incur such high costs. d. The number of issues is highly cyclical.

Question

Business

Lukas Bray

5 January, 10:44

Which of the following is NOT one of the four characteristics of IPOs that puzzle financial economists? Select one: a. The long-run performance of a newly public company (three to five years from the date of issue) is superior to the overall market return. b. On average, IPOs appear to be underpriced. c. Total costs of the IPO are very high, and it is unclear why firms willingly incur such high costs. d. The number of issues is highly cyclical.

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Answers (1)

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Kelvin Marquez · Answer 1

A

Explanation:

IPO, a synonym for initial public offering is a process of offering to the public new stock issuance through an underwriter.

IPO comes with a lot of benefit, nevertheless financial economist have some concern about it.

Of all the options given in the question, the long run of a new public company, (three to five years from the date of issue) being superior to the overall market returns is the only exception