The Research On Theory And Methodology Of Enterprises IPO's Pricing In Stock Market

As being established for 14 years, the Chinese stock market experienced several circulation. Due to the differences of market economic environment and system between China and western countries, the enterprises and stock market of China have their own special characteristics, such as developing and revolution. Therefore the enterprises valuation is influenced by more factors, especially the systematic ones.Based on that character of China's stock market, considered the specialty of Chinese market and the enterprises, this paper does researches on the theories and methods of an enterprise's initial public offering(IPO).First, this research gives a brief introduction of the background, the significance, the aim of IPO pricing research, the framework, research method and the thinking clew of this paper. Then there is a summary of the theories and documents about the IPO pricing, including the IPO underpricing, the long-term underpricing, and the IPO pricing under the institutional economics framework.Then the research does a comparative analysis of the way of IPO pricing between domestic and foreign enterprises. And detailed comparison is made between every pricing model.On the foundation of theoretical researches, this paper does systemic empirical researches including the empirical research on factors affecting the underpricing of IPOs, the empirical research on factors affecting the pricing of IPOs, the empirical research on models that applied in the pricing of IPOs.According to the theoretical analysis and empirical researches, the paper offers the suggestions on the IPO pricing policy, and gets the persuasive conclusion that, the IPO price is closely relative to the value of the enterprise, but that's not the whole story. That could be seen clearly in the widespread underpricing of Chinese enterprises. Therefore, in the complicated process of determining the IPO price, on one hand, we should consider the international accepted pricing methods, as well as the industry of the enterprise and time it offers, on the other hand, we should change the traditional pricing thoughts, namely, the ability of creating cash flow instead of the ability of making profit.