Director reputation and the underpricing of initial public offerings of equity

Howard, Richard. (1994). Director reputation and the underpricing of initial public offerings of equity Honours Thesis, Dept. of Commerce, The University of Queensland.

       
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Author Howard, Richard.
Thesis Title Director reputation and the underpricing of initial public offerings of equity
School, Centre or Institute Dept. of Commerce
Institution The University of Queensland
Publication date 1994
Thesis type Honours Thesis
Total pages 139
Language eng
Subjects 15 Commerce, Management, Tourism and Services
Formatted abstract This thesis investigates the role of director reputation in explaining cross-sectional variation in the underpricing of initial public offerings of equity. The board of directors is viewed as an efficient monitoring mechanism that provides assurances in an asymmetrically informed market regarding the production investment strategies and expected payoffs of the firm that cannot be provided by either the auditors or underwriters to the issue.

The assurances provided by the board of directors in the market for initial offerings are viewed as resolving part of the outstanding information asymmetry between market participants. Lower initial returns are predicted to accrue to investors in this instance. This thesis also examines the interactions between the attestors to the issue with a view to determining the efficient combination of attestation services.

The results of the univariate and multivariate statistical testing provide some support for the hypotheses that the underpricing of initial offerings is related to the reputation of the directors and underwriters to the issue. No evidence was found in support of the relationship linking auditor reputation to initial returns. Strong empirical support was found for the argument that the certifications of the attestors are complimentary.

 
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Created: Thu, 02 Dec 2010, 12:17:07 EST by Muhammad Noman Ali on behalf of The University of Queensland Library