Stock Issue Price and the Entrepreneur's Information Manipulation

摘要

Considering information asymmetry between the entrepreneur and external investors,this paper makes a hypothesis that the entrepreneur would manipulate information when issuing shares,and derives a stock issue price model based on information manipulation and effort the entrepreneur would make.Analysis of the model shows the level of information manipulation does affect the stock issue price.Market regulators should improve the capacity of identifying information manipulation and increase penalties for manipulators,so that the market can be more accurately pricing shares being issued.