Project #95537 - Finance Theory Assignment

Task
"Question 1 Consider a large number of privately-held firms headquartered in different counties in the U.S. Some are located in central areas (i.e. urban areas or financial centers such New York City, Boston, etc.) and other are located in remote areas (i.e. rural areas or non-financial centers). Assume that these firms are considering becoming publicly listed. Discuss in detail whether and how the geographic location of these firms would influence the level of IPO underpricing associated with these firms?
Please write less than one page (single–spaced) to answer this question.
 
Question 2 There is a theoretical work suggesting that the level of IPO underpricing should be negatively associated with the level of trust in a society. However, a recent empirical work testing this theoretical prediction (using over 12,000 IPOs in located in 43 countries in the world) finds that the relationship between trust and IPO is actually positive. That is the higher the level of trust in a society, the higher the IPO underpricing in a country. Hence the theory is not supported (i.e. does not hold). Find an explanation to this empirical finding. For your information trust in a society is defined as the fundamental confidence an individual has toward others to have a fair return in any contract.
Please write less than one page (single–spaced) to answer this question.


The main question for #1 is: "Assume that these firms are considering becoming publicly listed. Discuss in detail whether and how the geographic location of these firms would influence the level of IPO underpricing associated with these firms?"

As for #2, the main question is "Find an explanation to this empirical finding. For your information trust in a society is defined as the fundamental confidence an individual has toward others to have a fair return in any contract. "

These are just straight theory questions and not research, the other info provided in the questions are just provided as information. Would like for this to be done asap please. Thanks!

Subject Business
Due By (Pacific Time) 11/23/2015 08:30 pm
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