what is IPO underpricing? How do asymmetric information model explain this phenomena?Briefly explain

Q: In what situations should managers consider the use of stockdividends?

A: Stock dividend: It could be a dividend installment made in stocks instead of as cash to…

Q: How do convertibles reduce agency costs?

A: Agency costs: An agency cost is a kind of inside business cost which originates from the movements…

Q: What are the difference between intrapreneurship and entrepreneurship

A: Entrepreneurship means the willingness of an individual to start a business and undertake the risk.…

Q: What is an IPO?

A: Initial public offering refers to the offering which is done first time by any private corporation…

Q: how signaling content affects dividend policy definition

A: According to signalling theory any positive signal indicates positive indicators and will increase…

Q: What is oversubscribed (IPO)?

A: Introduction: Initial public offering (IPO) happens when a company is first selling shares to the…

Q: how signaling content affects dividend policy

A: Dividend policy is a policy a corporation uses to organize its dividend pay-out to its shareholders…

Q: Explain the mechanism of using financial leverage as a takeover defense tool

A: Leverage is an investment strategy of using borrowed money specifically, the use of various…

Q: What is an initial public offering (IPO)?

A: Initial public offer is the first step of listing the common stocks of a company in the stock…

Q: pricing simultaneous transactions and to decompose a total CVA into its trade-level contributions…

A: Here discuss about the details of the uses of incremental CVA and marginal CVA for the trade and…

Q: What are BreadTalk Group’s main revenue generators?

A: BreadTalk Group is a snack and beverage company based in Singapore. It was founded in the year 2000.…

Q: What are the relationships between Enterprise / Equity Values and the DCF Approach

A: DCF approach: It is the model in which the net present value of all the cash to be received in the…

Q: What is an arbitrage opportunity

A: Arbitraging involves simultaneously buying and selling of an asset in spot or future to earn a…

Q: What is meant by purchasing power parity?

A: Purchasing power parity It is a measuring of the prices in various other countries that utilizes the…

Q: Write down what are the disadvantages of shareholders equity?

A: Equity is one of the common sources to raise finance. Whenever a company requires finance it can…

Q: How can we determine the firm's liquidity?

A: Liquidity: It can be defined as the ease or comfort with which a firm can convert its securities and…

Q: How do the FCFE, APV, and corporate valuation approaches differ from one another? How are they…

A: FCFE, APV and corporate valuation all are techniques of valuation on the basis of equity. This…

Q: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?

A: Make or buy decision: It is the decision made by the company to manufacture the product or buy it…

Q: why is there a trade-off between liquidity and solvency?

A: A firm may raise capital through different sources, including equity shares, preference shares,…

Q: do you understand by the term "Liquidity Management". Why is important ?

A: in organisation company have large amount money held in different forms assets but it takes time to…

Q: what are the dividend constraints?

A: In the world of finance dividend constraints are a reality that companies and shareholders have to…

Q: Why does IPO underpricing exist?

A: IPO - IPO stands for Initial Public Offer. When company want to list their shares on the stock…

Q: What is initial public offering (IPO)?

A: Primary market is the market where the securities will be sold initially. Public buy the securities…

Q: What is purchasing power parity? How might afirm use this concept in its operations?

A: The question is based on the concept of equilibrium exchange rate in forex market, Purchasing power…

Q: What is liquidity (corporation)?

A: Ability of a firm to raise the cash whenever there is need is known as liquidity of the company.…

Q: What are the main costs associated with an initial public offering (IPO)?

A: Initial Public Offering Initial public offering refers to the process by which a company sells its…

Q: Purchasing Power Parity (PPP) theory fails to explain the facts. explain whether true or false

A: Buying power parity is a method of comparing the absolute purchasing power of currencies and, to…

Q: Define Arbitrage Pricing Theory (APT)

A: Arbitrage is the method of making profit from the temporary change in the cost of shares by buying…

Q: What are the direct and indirect costs of an IPO?

A: An initial public offering or IPO is the method of issuing the shares of the company to public for…

Q: Explain advantages of Centralization and advantages of De-Centralization in terms of economic…

A: Centralization is the process of making all the relevant decisions from the central authority. The…

Q: What is information content hypothesis (dividends)?

A: Managers of the company generally prefer not to reduce the dividends paid to the shareholders with a…

Q: Explain how the market multiples method isused to determine the value of a target firm to apotential…

A: Market multiple methods are defined and calculate based on the valuation model and transaction…

Q: Discuss the key assumptions of Arbitrage Pricing Theory (APT) model and the implications of these…

A: Solution- APT(Arbitrage Pricing Theory) is a multi-factor technical model supported the link between…

Q: Briefly explain Purchasing Power Parity?

A: Purchasing Power Parity (PPP) is a theory of exchange rate determination. Purchasing power parity is…

Q: Define the clientele effect, and explain how it affects dividendpolicy

A: Dividend policy is defined as a guiding principle in determining what portion of earnings be paid…

Q: why a specific company would purchase the stock of another and provide an example

A: The stock values of the two companies typically move in predictable opposing directions after an…

Q: (e) High dividend reduces agency costs and resolves uncertainty. Discuss.

A: Introduction : In simple words, agency costs refers to the internal costs that arises in a company…