Business, Management and Accounting
8 years ago

IPO Issuers Face Legal Risks and High Expenses, Study Finds

The Journal of Law and Economics
Issuer Expenses and Legal Liability in Initial Public Offerings
Randolph P. Beatty, Ivo Welch

Paper Summary

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The article looks at how companies preparing to go public make decisions about hiring experts like lawyers, auditors, and investment bankers. The researchers studied 823 initial public offerings from 1992 to 1994 to see how expert pay, IPO pricing, and uncertainty are influenced by expert quality, legal caution, and other factors. They compared their findings to similar studies from the 1980s.