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Finance Concepts - Assignment(PDF)

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Added on  2021-06-14

Finance Concepts - Assignment(PDF)

   Added on 2021-06-14

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Running head: FINANCEFinanceName of the Student:Name of the University:Authors Note:
Finance Concepts - Assignment(PDF)_1
FINANCE1Table of ContentsQuestion:....................................................................................................................................23. Evaluating the occurrence of short run IPO under-pricing in Australia and US bycontrasting the results with empirical study conducted on Hong Kong:...................................2Reference and Bibliography:......................................................................................................6
Finance Concepts - Assignment(PDF)_2
FINANCE2Question:3. Evaluating the occurrence of short run IPO under-pricing in Australia and US bycontrasting the results with empirical study conducted on Hong Kong:The theories comprising of behavioural and asymmetric composition can beidentified, as the measure fulfilling the viability of IPO under-pricing in US and Australianmarket. Moreover, the asymmetric theory indicates that information distribution is notadequately conducted among investors and companies, as it allows the investor to gainabnormal gains. Moreover, the behavioural theory indicates the willingness of the investor toinvestment in a stock during their IPOs. Hence, the combination of both asymmetric andbehavioural theory directly supports that presence of IPO under-pricing, as it allows theinvestor to generate high rate of return from investment. The investors with the rightinformation forces the price of IPO down to maximise the returns that is generated frominvestment. Hence, it could be understood that both asymmetric and behavioural theorysupports the presence of under-pricing of IPO shares in US and Australian stock market.The empirical research mainly focuses on determining the overall under-pricing ofinitial public offerings which is been conducted in Hong Kong stock market. The researchpaper uses the overall duration of 10 years to identify the implications and impact of under-pricing on initial public offerings, while detecting its presence in the Hong Kong stockmarket. Identifying the presence of under-pricing measure used in Hong Kong stock marketcould relevantly help in understanding its presence in Australian and US stock market(Chong, Yuan and Yan 2010). The research estimates the average IPOs and pricing level inHong Kong stock market to detect presence of under-pricing in the stock market.In thiscontext, Boulton, Smart and Zutter (2017) stated that with the under-pricing of IPOs the
Finance Concepts - Assignment(PDF)_3

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