Empirical Analysis Of The Effect To The IPO Underpricing Rate On The SME Stock Market After The Reformation Of Equity Division

From the establishment of China's stock market,so far there has been a serious phenomenon of equity division.With the beginning of the reformation of equity division in May 9,2005,the troubled problem of equity division has been settled.Equity division has been cursed as the key factor of the high IPO underpricing rate on china's stock market.Thus,with the finish of the reformation,has the high IPO underpricing rate on china's stock market reduced?This paper firstly,beginning with the review of the relevant research of the IPO underpricing and the theory of the liquidity Premium,Summarize the results of studies to the IPO underpricing and the theory of the liquidity Premium at home and abroad.Then review the history of the equity division,and the whole process of the reformation of equity division.And look through the liquidity Premium theory to analyze the effect of the finish of the reformation of equity division to the IPO underpricing rate on the small and medium—sized enterprise stock market.Compare and analyze the IPO Samples before and after the reformation of the equity division,with regression method.It has been proved through empirical study that:With the finish of the reformation of equity division,the IPO underpricing rate has become higher,for the lag of relevant reformation; the factors of the IPO underpricing rate has changed Significantly,the quality of the IPO has become more important;the lucky rate to the IPO underpricing rate has reduced.The result is,with the finish of the reformation of equity division,the high IPO underpricing rate has changed significantly.However,with the lag of relevant reformation and the developing market conditions,the lonely reformation of equity division can hardly change the high IPO underpricing rate on the small and medium—sized enterprise stock market.