Legal Liability and Issuer Expenses in IPOs
Ivo Welch
University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)
Randolph P. Beatty
University of Southern California - Leventhal School of Accounting
September 1994
Abstract:
Issuers of Initial Public Offerings (IPOs) face numerous decisions, of which the selection and compensation of experts---the legal counsel, the auditor and the investment banker---are among the most important. Using new data, our paper investigates the role of the entire IPO coalition (including the legal counsel). We examine how expert compensation, IPO underpricing, IPO underpricing uncertainty, and subsequent performance are related to: [1] expert quality; [2] legal caution and liability; [3] non- legal risk signals; and [4] one another.
JEL Classification: K2, G21
working papers series
Suggested Citation
Welch, Ivo and Beatty, Randolph P., Legal Liability and Issuer Expenses in IPOs (September 1994 ). Available at SSRN: http://ssrn.com/abstract=5675
