Initial uncertainty about the value of IPOs combined with costs of over and underpricing make it risky to set fixed-offer prices. Assuming issuers seek to maximize proceeds net of the spread, we show it is optimal for book-building underwriters and best-efforts issuers to set the fixed-offer...

Much of the early research on contrarian performance adjusts for risk using a Jensen's alpha estimated with in-sample returns in either real time or event time. The use of in-sample returns means that beta is estimated with the same observation period returns it is intended to risk adjust. This...