Part of road show to promote a firm’s IPO is called book building where institutional investors submit their intention to how many shares at what price levels. The investment bank will use this information to determine an offer price such that it can raise most capital. It seems that intentionally submitting lower prices would benefit the institutional investors, however the investment bank does not have to worry about this potential cheating behavior. True False
Part of road show to promote a firm’s IPO is called book building where institutional investors submit their intention to how many shares at what price levels. The investment bank will use this information to determine an offer price such that it can raise most capital. It seems that intentionally submitting lower prices would benefit the institutional investors, however the investment bank does not have to worry about this potential cheating behavior. True False
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
Related questions
Question
N2
Part of road show to promote a firm’s IPO is called book building where institutional investors submit their intention to how many shares at what price levels. The investment bank will use this information to determine an offer price such that it can raise most capital. It seems that intentionally submitting lower prices would benefit the institutional investors, however the investment bank does not have to worry about this potential cheating behavior.
True
False
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education