Ivey Publishing
Initial Public Offerings
Product Number:
9B14N005
Publication Date:
05/13/2014
Revised Date:
05/13/2014
Length:
13 pages (13 pages of text)
Product Type:
Note
Source:
Ivey
This note provides an overview of Initial Public Offerings (IPOs) and addresses the methods used to value companies undergoing an IPO. It begins with a brief introduction to IPOs and the rationale behind going public, followed by an analysis of IPOs from the investor’s perspective. Next, the IPO process is outlined and explained, including the underwriter choice, selling procedure, pricing and activities in the aftermarket. Lastly, the note examines the valuation methodology used in the pricing stage of IPOs. This includes the discounted cash flow method, the use of market multiples of comparable firms, as well as other situational considerations when determining the initial price per share range and final offering price.
Learning Objective:
  • To introduce students to IPOs.
  • To understand the rationale for going public.
  • To address the IPO process and valuation of a start-up firm.
Issues:
Disciplines:
Finance,  Entrepreneurship
Industries:
Finance and Insurance
Setting:
2014
Intended Audience:
Undergraduate/MBA
Price:
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download
Associated Materials
Translations: Simplified Chinese (11 pages) , French (15 pages)
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