Problem 6: Miscellaneous topics including debt prospectuses,…
Problem 6: Miscellaneous topics including debt prospectuses, IPO activity and underpricing, risk-return relation, capital budgeting, and capital structure (22 points) b) The attached figure (IPOs-France.pdf) shows the average first-day return and the number of IPOs in France for each year from 1983 to 2024. The average first-day return is indicated by the green line (right y-axis), while the number of IPOs is displayed by the red bars (left y-axis). How did the number of firms going public in France evolve over time? How did the average underprizing evolve over time? Compared to the U.S. market , are French IPOs, on average, fairly priced? (4 points)