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Initial Public Offering

S/F/36. IPO valuation and analysis

WORDS:

3000

DATE:

2005

PRICE:

39.99 GBP

This work presents classical analysis of the Initial Public Offering (IPO). First of all, the general financial position of the company and the quality of management are scrutinized. This is an important step in the analysis as it allows approaching the valuation step with all necessary adjustments made beforehand. Then the valuation process itself is conducted. The author uses post-IPO cash-flow analysis in order to allow for substantial reduction of debt due to the IPO. CAPM and WACC concepts are utilized to obtain the value of the company. However, this work is not only useful for IPO valuation. The author makes comprehensive analysis of benefits and disadvantages of the IPO. The role of the underwriter and qualities it has to possess are also discussed. Since there may exist the phenomenon of short-run overperformance and long-run underperformance, the analysis of stock market returns is accomplished. Finally, the appropriateness of different stock exchanges for different types of company is discussed. The paper will be useful for students doing comprehensive case-study of the IPO.

KEYWORDS: f, ipo, valuation,