Why Has Ipo Underpricing Changed over Time - 13588 Words

Why Has IPO Underpricing Changed Over Time? Tim Loughran and Jay Ritter* lu the l9SOs. the average first-day rcliirn on inilial public offerings (IPOs) was 7%, The average firsl-day return doubled to almost I5 i during 1990-1998. before jumping to 65% during Ihe internet bubble years of 1999-2000 and then reverting la / i % during 2001-2003. We attribute much of the higher underpricing during the bubble period to a changing issuer objective function. We argue that in the later periods there wav less focus on maximizing IPO proceeds due to an increased emphasis on research coverage. Furthermore, allocations of hot IPOs to the personal brokerage accounts oj issuing firm executives created an incentive to seek rather than avoid†¦show more content†¦(Money on the table is the change between the offer price and the first closing market price, multiplied by the number of shares sold.) The hypothesized reasons for the increased acquiescence are reduced chief executive officer (CEO) ownership, fewer IPOs containing secondar y shares, increased ownership fragmentation, and an increased frequeney and size of friends and family share allocations. These changes made issuing firm decision-makers less motivated to bargain for a higher offer price. The realignment of incentives hypothesis is similar to the changing risk composition hypothesis in that it is changes in the characteristics of ownership, rather than any nonstationarities in the pricing relations, that are associated with changes in average underpricing. It differs from the changing risk composition hypothesis, however, in that underpricing is not determined solely by the investor demand side of the market. In our empirical work, we find little support for the realignment of ineentives hypothesis as an explanation for substantial changes in underpricing. We find no relation between the inclusion of secondary shares in an IPO and underpricing. And although CEO fractional ownership was lower during the internet bubble period, the CEO dollar ownershi p (the market value of the CEO s holdings) was substantially higher, resulting in increased incentives to avoid underpricing. Furthermore, it is possible that changes inShow MoreRelatedThe First Life Cycle Theory1206 Words   |  5 Pagessuggested that take-over targets are easier for potential buyers to spot when they are public. Furthermore it is easier for potential buyers to pressure the targets for concessions on price than it is to pressure external investors. Thus in theory an IPO facilitates the acquisition of their company at a higher price than an outright sale. However, although the potential price may be higher with an IPO, IPOs are also often costly to perform with their fees, listing requirements and underpricing. 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Play in Early Childhood-Free-Samples for Students-Myassignment

Question: Analyse various Issues raised in Early Childhood and Examine their Impact on Children. Answer: Introduction Early childhood is a vital stage for all children that lay down the foundation for their growth in life; it is the stage between 0-8 years that is considered to be a significantly sensitive stage. Many studies have provided that the growth of active neural pathways in the brain happened during the early childhood stage and especially before the age of three. Therefore, it is considered essential that children are given various opportunities for emotional, social, intellectual and physical growth which provide them numerous educational, social and economic benefits. During this critical period of early childhood development, parents, teachers, and educators face various issues that can the adversely affect the development of a child, such as construction issues, technology problems, ethics, readiness and many others. This essay will focus on analysing various issues raised in early childhood and examine their impact on children. Further, the article will provide recommendations to ens ure these problems are not affecting childrens growth negatively Issues in Early Childhood Early childhood is a sensitive stage for children since most of their development, both mental and physical, happened in such phase. The parents, teachers, and educators face various challenges which negatively affect the development of a child. The children face issues regarding readiness and transition in early childhood. Readiness means preparing for future events; children readiness is defined as the transition into kindergarten (Schwartz, Tuchman, Hobbie Ginsberg, 2011). Various factors, such as parents, school administration, teachers, society and the local community, work together to provide a satisfactory school experience to children. In other words, it means preparing the children to succeed in school, socially, cognitively and emotionally; these factors differentiate the disadvantaged children with affluent peers. The transition from early childhood home to the new facility is a significant experience for both children and their families, and this procedure should be smoo th and completed within appropriate time. Effective school readiness program provides necessary information to the parents and healthcare professionals that assist in identifying whether the child has necessary skills and qualities to start a fruitful school experience. Readiness defines the ability which is essential for children to learn and succeed in school (Vogler, Crivello Woodhead, 2008). The quality of education assist children in succeeds or failed in life, therefore, it is a significantly important procedure. The importance of the transition to kindergarten has become a rising issue for federal and state governments due to its importance on childrens future. A national survey conducted on kindergarten teachers experience, found that more than half of children face difficulty in kindergarten. The transition is difficult for children because they lack the mental and physical skills or knowledge to learn new things smoothly, and their families and local communities failed to realise their problems (Peters, 2010). For inadequately prepared children it is considerably difficult to learn and understand schools environment, it also has a negative influence on their studies. These issues also happen due to the problem in the family since the parents failed to teach their kids necessary skills for smooth transitions; it is the primary responsibility of parents to prepare their child for a smooth transition (Mistry, Benner, Biesanz, Clark Howes, 2010). For example, before the transition, parents can prepare their child for school by establishing similar environment at home. They can buy uniforms, pack lunch and establish few rules to make children aware regarding schools environment. The parents can role-play with their children to teach them and make them familiar with school regulations, such as asking permission for using the bathroom, fixed time for a lunch break and teaching them discipline behaviour. Kagan Tarrant (2010) provided that a substantial percentage of children are deprived of necessary resources which are essential for their physical and mental development. More than one-fifth of the children lived in poverty, and around half of all children face one or more risks relating to the gap in school readiness. Due to this gap, there is a considerable shortfall in pro-social behaviour, academic achievement, and educational attainment, all of which resulted in higher unemployment and criminality rates. The children with better readiness have a smooth transition to the school which resulted in better academic education; on the other hand, children without the skills face difficulty in the future. The lack of readiness is disadvantageous for the children because they are not able to perform better than compared to their affluent peers in professional positions. Those children and their families face various difficulties which also negatively affect society (Dockett Perry, 2009 ). All professional jobs require a high level of academics which is difficult to attain without smooth transition and efficient readiness. The lack of readiness increases the rate of unemployment, crimes, and suicide, which negatively affect the development of society. The children face readiness and transition issues in the traditional education system, but they are surprisingly comfortable with modern technology. Young children love using and playing with modern technology, such as tablets, smartphones, music players, televisions, cameras, computers, and others (McKenney Voogt, 2010). The children use these technologies in their homes, classrooms, or child care centers. In case of schools, teachers have always been using technologies such as television, DVD or recorder to show documentaries, teach history or teach students how to use such gadgets. But, now teachers are using considerable powerful devices such as smartphones, tablets, or computers in their professional and personal lives. Modern technology assists teachers in performing various tasks, but they should avoid using them in schools and day care centres. Teachers should perform such activities which build physical and mental abilities of students rather than exposing them to gadgets. As per Sadao Robinson (2010), many studies have proved the negative impact of technology on childrens development that resulted in serious problems such as obesity, attitude problems, decreased academic performance, negative social life, eyesight problems, irregular sleep patterns and many others. Even with numerous of disadvantages, people keep using technology in schools, homes, and child care centers because they are powerful tools for teaching and learning. The time spent by children on technology is significantly crucial because it affects them positively or negatively. Nowadays children did not get any free time from the technology; they use it at home, school, and other places because it is easily accessible (Epstein et al., 2008). Now children use technology for various reasons such as watching movies, playing video games, listing to music, surf web, and many others. These activities take up a lot of the childrens time due to which they did not go outside to play, which stop their mental and physical development. According to Northcote (2011), spending too much time on gadgets negatively affects the development of social skills in children; they did not experience any face to face interactions which hinders their social development. The lack of social interaction ability influence their professional carer because most of the careers require a high level of social skills such as sales job, marketing, advocacy, health care and many others. The use of Internet-based services is increasing rapidly; the popularity of internet of things connects everyday gadgets to the internet which also made them easily accessible to children. The Internet is not a safe place for children because it contains profanity, sexual content and violent material that can be easily accessed; it has become difficult for parents to manage their childrens internet usage (Currie Eveline, 2011). The dependability of children on technology for learning and entertainment is a potential threat to the traditional method of educat ion and socialising. The parents and teachers are required to reduce and monitor the use of technology by children since it can adversely influence their development and professional opportunities. The ethics are significantly crucial while using the internet and it is also necessary to teach the principle of ethics to children in early childhood. A childs experience and learning in early years have a significant impact on his/her future opportunities. The code of ethics learned by children in early childhood allows them to take appropriate actions in conflicting situations that they face in their life (Mac Naughton, Rolfe Siraj-Blatchford, 2010). The ethics define right or wrong actions taken by peoples based on their personal morals and values during ethical dilemmas. The ethical dilemmas are the moral conflicts which require peoples to take appropriate actions in an unfavorable situation based on their personal and professional values. The teaching of ethical and moral values to children helps them become a good person who contributes to the development of society. As per Thomas (2012), the lack of ethics can adversely affect personal life of a child, and it is also dangerous for society. The lack of ethics increases the rate of crimes in the community because it is easier for unethical peoples to commit a crime. To reduce the rate of crimes, it is necessary that every person follows the principle of ethics. The lack of ethics affected the education of children because they are less likely to do the tasks given by the teachers. Lack of ethics also impacted the professional life of peoples since they are more likely to commit fraud in a company. According to Alderson Morrow (2011), the code of ethics provided by Early Childhood Australia shows the importance of teaching ethics to children at an early stage. A collaborative contribution of parents, teachers, early childhood professional, and society is necessary to teach children importance of ethics. Many times the parents failed to teach ethical values to their children which negatively affect s their readiness and transition. The parents have the responsibility to educate their children about ethics and its importance. Unfortunately, there comes a time when children lie to their parents or cheats in an exam, but it does not mean it is too late for them. The parents should do their job by establishing a system of values and daily enforce such values on the children (Brierley Larcher, 2010). There are two steps that parents can use to teach their child regarding the importance of ethics. Firstly they are required to be a focus on the values which are essential to be taught and secondly they are required to daily enforce such values by relating them with positive and negative consequences. Ethics cannot be taught overnight, and it is certainly not an easy process. Other than parents, teachers and early childhood professionals can also assist in teaching children the importance of ethics. The parents, teachers, and society are requiring adopting a suitable approach that teaches children role of ethics in per sonal and social development (Giovacco-Johnson, 2011). The teaching of ethics is an essential part of early childhood because it improves the future growth and professional life of children Conclusion To conclude, early childhood is a critical stage for children because it influences their future development and professional career. The children face various issues during the early childhood such as readiness and transition problem, technology issues and ethical dilemmas. The readiness defines preparation for future events to smooth the transition of children from home to kindergarten or school. The advancement of technology has increases issues such as profanity, lack of sleep, obesity, negative attitude, eyesight problems, disturbed social life and many others. The parents and teacher should reduce the time spent by children using technology and increase their social interactions which will assist children in their professional career. Ethics play a crucial role in the development of a person and society, and lack of ethical principles creates several problems such as increasing rate of crimes, social imbalance, and many others. The parents, teachers and local community should c ollaboratively remove these issues from the early childhood of children to improve their social and professional development. References Alderson, P., Morrow, V. (2011).The ethics of research with children and young people: A practical handbook. Sage Publications Ltd. Brierley, J., Larcher, V. (2010). Lest we forget research ethics in children: perhaps onerous, yet absolutely necessary. Currie, J., Eveline, J. (2011). E-technology and work/life balance for academics with young children.Higher Education,62(4), 533-550. Dockett, S., Perry, B. (2009). Readiness for school: a relational construct.Australasian Journal of Early Childhood,34(1), 20. Epstein, L. H., Roemmich, J. N., Robinson, J. L., Paluch, R. A., Winiewicz, D. D., Fuerch, J. H., Robinson, T. N. (2008). A randomized trial of the effects of reducing television viewing and computer use on body mass index in young children.Archives of pediatrics adolescent medicine,162(3), 239-245. Giovacco-Johnson, T. (2011). Applied ethics as a foundation in early childhood teacher education: Exploring the connections and possibilities.Early Childhood Education Journal,38(6), 449-456. Kagan, S. L., Tarrant, K. (2010).Transitions for Young Children: Creating Connections across Early Childhood Systems. Brookes Publishing Company. PO Box 10624, Baltimore, MD 21285. Mac Naughton, G., Rolfe, S., Siraj-Blatchford, I. (2010).Doing early childhood research. McGraw-Hill Education (UK). McKenney, S., Voogt, J. (2010). Technology and young children: How 47 year olds perceive their own use of computers.Computers in Human Behavior,26(4), 656-664. Mistry, R. S., Benner, A. D., Biesanz, J. C., Clark, S. L., Howes, C. (2010). Family and social risk, and parental investments during the early childhood years as predictors of low-income children's school readiness outcomes.Early Childhood Research Quarterly,25(4), 432-449. Northcote, M. (2011). Teaching with Technology: Step Back and Hand over the Cameras! Using Digital Cameras to Facilitate Mathematics Learning with Young Children in K-2 Classrooms.Australian primary mathematics classroom,16(3), 29-32. Peters, S. (2010). Literature review: Transition from early childhood education to school.Report to the Ministry of Education, New Zealand. Sadao, K. C., Robinson, N. B. (2010).Assistive Technology for Young Children: Creating Inclusive Learning Environments. Brookes Publishing Company. PO Box 10624, Baltimore, MD 21285. Schwartz, L. A., Tuchman, L. K., Hobbie, W. L., Ginsberg, J. P. (2011). A social?ecological model of readiness for transition to adult?oriented care for adolescents and young adults with chronic health conditions.Child: care, health and development,37(6), 883-895. Thomas, L. (2012). New possibilities in thinking, speaking and doing: Early childhood teachers' professional identity constructions and ethics.Australasian Journal of Early Childhood,37(3), 87. Vogler, P., Crivello, G., Woodhead, M. (2008).Early Childhood Transitions Research: A Review of Concepts, Theory, and Practice. Working Papers in Early Childhood Development, No. 48. Bernard van Leer Foundation. PO Box 82334, 2508 EH, The Hague, The Netherland