The non-7% solution |
| |
Authors: | Jacqueline L. Garner Beverly B. Marshall |
| |
Affiliation: | 1. LeBow College of Business, Drexel University, Philadelphia, PA 19104, United States;2. Auburn University, Auburn, AL 36849, United States |
| |
Abstract: | While the vast majority of underwriters charge a gross spread of exactly 7%, as documented in Chen and Ritter (2000), more than a third charge something other than 7%. Among offerings of $50 million and below where underwriters charge the firm other than 7%, two-thirds of issuers pay more than published NASD1 compensation guidelines. When underwriters charge less than expected, they do not trade-off IPO compensation with underpricing. However, our evidence suggests a trade-off between IPO compensation and future SEO business among underwriters that charge something other than 7% and less than expected. Underwriters that overcharge may provide a signal to investors about future underperformance. |
| |
Keywords: | G18 G24 |
本文献已被 ScienceDirect 等数据库收录! |
|