Stock Prices and IPO Waves (.pdf)
Pastor and Veronsi explain IPO waves by creating a model of “optimal IPO timing.” Their model predicts that firms will be more willing to issue shares when the required returns are lower, when the firm’s expected cash flows are higher (which could be interpreted at there being more positive investment opportunities-and therefore likely a greater need for cash), and “when the uncertainty surrounding … [ Read more ]
Content: Article | Authors: Lubos Pastor, Pietro Veronesi | Source: University of Chicago | Subjects: Finance, Industry Specific | Industry: Investment Banking