Which of the following statements regarding initial public offerings (IPOs)is true?
A)Approximately 50% of the firm is sold in the typical IPO.
B)The IPO stock price typically increases about 2% when the lock-up period is about to expire.
C)IPOs tend to be slightly overpriced.
D)On average, IPO firms underperform similar benchmark firms, beginning 6 months after the IPO.

Question

Quizplus · Accepted Answer

On average, IPO firms tend to underperform similar benchmark firms after the initial excitement and speculation subside, typically starting around 6 months post-IPO.

Which of the Following Statements Regarding Initial Public Offerings (IPOs)is