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ompanies that are owned by a group of investors, who could also be associated with the company's management, make initial public offerings. Such ompanies are referred to as nitial public offering perfo publicly owned corporations closely held corporations

ompanies that are owned by a group of investors, who could also be associated with the company's management, make initial public offerings. Such ompanies are referred to as nitial public offering perfo publicly owned corporations closely held corporations

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Type of corporation Companies that are owned by a group of investors, who could also be associated with the company's management, make initial public offerings. Such companies are referred to as Initial public offering perfo publicly owned corporations closely held corporations When the demand for an initiar puvne uneny uru ur securlties exceeds the number of securities issued, the offering is deemed to be: O Oversubscribed O Undersubscribed Indigo Inc. is going public and issuing 150,000 shares of common stock. The capital raised in the IPO will fund the company's proposed expansion. A Dutch auction is used to allocate shares in the Indigo IPO. The following table shows the number of shares requested by potential investors in each row. Bids Number of Shares Requested Price per Share Bidder # 1 50,000 $56 Bidder # 2 100,000 54 Bidder # 3 150,000 52 Bidder # 4 200,000 50 Bidder # 5 250,000 48 Bidder # 6 300,000 46 What should be the firm's IPO offer price? O $48 O $54 O $55 O $52 O $57 O O o O o
Transcribed Image Text:Type of corporation Companies that are owned by a group of investors, who could also be associated with the company's management, make initial public offerings. Such companies are referred to as Initial public offering perfo publicly owned corporations closely held corporations When the demand for an initiar puvne uneny uru ur securlties exceeds the number of securities issued, the offering is deemed to be: O Oversubscribed O Undersubscribed Indigo Inc. is going public and issuing 150,000 shares of common stock. The capital raised in the IPO will fund the company's proposed expansion. A Dutch auction is used to allocate shares in the Indigo IPO. The following table shows the number of shares requested by potential investors in each row. Bids Number of Shares Requested Price per Share Bidder # 1 50,000 $56 Bidder # 2 100,000 54 Bidder # 3 150,000 52 Bidder # 4 200,000 50 Bidder # 5 250,000 48 Bidder # 6 300,000 46 What should be the firm's IPO offer price? O $48 O $54 O $55 O $52 O $57 O O o O o
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