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Initial Public Offerings: CFO Perceptions


  • James C. Brau
  • Patricia A. Ryan
  • Irv DeGraw


We examine four issues pertaining to initial public offerings (IPOs) using a survey of 438 chief financial officers (CFOs). First, why do firms go public? Second, is CFO sentiment stationary across bear and bull markets? Third, what concerns CFOs about going public? Fourth, do CFO perceptions correlate with returns? Results support funding for growth and liquidity as the primary reasons for IPOs. CFO sentiment is generally stationary in pre- and post-bubble years. Managers are concerned with the direct costs of going public, such as underwriting fees, as well as indirect costs. We find a negative relation between a focus on immediate growth and long-term abnormal returns. Copyright 2006, The Eastern Finance Association.

Suggested Citation

  • James C. Brau & Patricia A. Ryan & Irv DeGraw, 2006. "Initial Public Offerings: CFO Perceptions," The Financial Review, Eastern Finance Association, vol. 41(4), pages 483-511, November.
  • Handle: RePEc:bla:finrev:v:41:y:2006:i:4:p:483-511

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    7. Stephen A. Rhoades, 1996. "Bank mergers and industrywide structure," Staff Studies 169, Board of Governors of the Federal Reserve System (U.S.).
    8. Johnson, Shane A. & Sarkar, Salil K., 1996. "The valuation effects of the 1977 Community Reinvestment Act and its enforcement," Journal of Banking & Finance, Elsevier, vol. 20(5), pages 783-803, June.
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    Cited by:

    1. repec:kap:sbusec:v:50:y:2018:i:2:d:10.1007_s11187-016-9832-8 is not listed on IDEAS
    2. Franck Bancel & Usha R. Mittoo, 2013. "Survey evidence: what do we know about European and US firms’ motivations for going public?," Chapters,in: Handbook of Research on IPOs, chapter 3, pages 57-75 Edward Elgar Publishing.
    3. Jeon, Jin Q. & Lee, Cheolwoo & Nasser, Tareque & Via, M. Tony, 2015. "Multiple lead underwriter IPOs and firm visibility," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 128-149.
    4. Grubisic Seba, Mihaela & Orsag, Silvije, 2015. "Corporate Motives For Public Shares Offering During The Financial Crisis," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 6(1), pages 99-114.
    5. repec:kap:decono:v:165:y:2017:i:4:d:10.1007_s10645-017-9302-y is not listed on IDEAS

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