Analysis of Long-Run Performance of IPOs

question 56

Multiple Choice

Analysis of long-run performance of IPOs:

• A) clearly shows returns in line with non-IPO equity returns
• B) is rather controversial and challenges the notion that investors are rational and that financial markets are efficient
• C) has not been performed
• D) all of the above
• E) Both (b) and (c)

---

Definitions:

Net Present Value

A financial metric used to estimate the value of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

Cash Flows

Movements of money into or out of a business, project, or financial product, often analyzed for assessing financial health or the viability of investments.

Demand Management

The process of forecasting, planning for, and managing the demand for products and services to optimize supply chain performance.

Service Sector

The segment of the economy that includes trade, financial, lodging, education, legal, medical, and other professional occupations.