Using data on 560 firm-commitment initial public offerings of common stock for the 1982-1983 period, we find that the cross-sectional distribution of one-day returns is modeled better as a mixture of two distributions, with the parameter estimates of one distribution being consistent with...

<link rid="b7">Brennan and Franks (1997)</link> and <link rid="b26">Stoughton and Zechner (1998)</link> provide contrasting arguments for why monitoring considerations create incentives for managers to underprice their firms' IPOs (initial public offerings). Like <link rid="b25">Smart and Zutter (2003)</link>, we examine these arguments using a sample of U.S....