Although the choice of an IPO offer price level would seem to have little economic significance, firms do not decide this arbitrarily. Our findings suggest that firms select their IPO offer prices to target a desired ownership structure, which in turn has implications for underpricing and...

When firms go public in an IPO, they must choose a number of shares to offer and a price level for those shares. Given an estimated total value, this division would seem to have little economic significance. Casual empiricism and the evidence from stock splits, however, suggest that firms do not...