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The importance of intangible assets in initial public offerings

Dimovski, William and Brooks, Robert 2005, The importance of intangible assets in initial public offerings, International journal of knowledge, culture and change management., vol. 4, pp. 1505-1509.

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Title The importance of intangible assets in initial public offerings
Author(s) Dimovski, William
Brooks, Robert
Journal name International journal of knowledge, culture and change management.
Volume number 4
Start page 1505
End page 1509
Publisher Common Ground Publishing
Place of publication Altona, Vic.
Publication date 2005
ISSN 1447-9524
1447-9575
Keyword(s) IPOs
intangibles
ASX
Summary This paper follows Beatty and Ritter (1986), who argue that lower uncertainty about the value of an initial public offering (IPO) reduces the 'need' for the underpricing of an IPo. Australian IPOs often identify the existence of intangible assets such as goodwill, licenses, brand names, trademarks, patents and capitalized research and development costs in the prospectus. This paper analyses if IPOs identifying the existence of such intangible assets in the prospectus might reduce uncertainty about their valuation and hence allow a lower underpricing return. While the reporting of intangible assets such as goodwill and license costs in the prospectus are not significant ingredients in the level of underpricing, the identification and valuation of intangible assets such as brand names, trademarks, patents and capitalized research and development costs is significant in reducing the level of underpricing return. Our findings are also consistent with previous studies concluding that both the size of the new issue and the use of an underwriter are important in the level of underpricing return.
Notes Reproduced with the specific permission of the copyright owner.
Language eng
Field of Research 150201 Finance
HERDC Research category C1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30003028

Document type: Journal Article
Collections: School of Accounting, Economics and Finance
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