Introduction to Corporate Finance

Ross et al.: Fundamentals
of Corporate Finance, Sixth
Edition, Alternate Edition

VI. Cost of Capital and

Long−Term Financial

Policy

16. Raising Capital © The McGraw−Hill^565
    Companies, 2002

537

FIGURE 16.2

Year

–20–40

806040 200

120100

1965

1970

1975

1985

1980

1990

1995

Percentage average initial return

2000

1960

Source: Roger G. Ibbotson, Jody L. Sindelar, and Jay R. Ritter, “The Market’s Problems with the Pricing of Initial Public Offer

ings,”

Journal of

Applied Corporate Finance

7 (Spring 1994), as updated by the authors.

Average Initial Returns by Month for SEC-Registered Initial Public Offerings: 1960–2000