Pástor, Lubos; Taylor, Lucian A.; Veronesi, Pietro - In: Review of Financial Studies 22 (2009) 8, pp. 3005-3046
We develop a model of the optimal initial public offering (IPO) decision in the presence of learning about the average profitability of a private firm. The entrepreneur trades off diversification benefits of going public against benefits of private control. Going public is optimal when the...