1. IPO Offering Size and Analyst Forecasts
- Author
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Chuntai Jin, Steven Xiaofan Zheng, and Tianze Li
- Subjects
Economics and Econometrics ,050208 finance ,Free cash flow ,Financial economics ,0502 economics and business ,05 social sciences ,Econometrics ,Economics ,Earnings growth ,050207 economics ,Initial public offering ,health care economics and organizations ,Finance - Abstract
In this paper, we examine how analysts react to IPO percentage offering size. We find that analysts predict lower long-term earnings growth rates for IPOs with larger percentage offering size. The sizes of both primary and secondary offering are negatively related to long-term growth rate forecasts. We find evidence that the free cash flow effect may be related to the negative relation between primary offering size and growth forecast.
- Published
- 2016
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