Type of corporation Spandust Industries Inc. recently raised capital through an initial public offering (IPO). Its stock can now be purchased on the NYSE. This company is referred to as: A closely held corporation A publicly owned corporation Initial public offering performance When the demand for an initial public offering (IPO) of securities exceeds the number of securities issued, the offering is deemed to be: Undersubscribed Oversubscribed 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 $59 Bidder # 2 100,000 57 Bidder # 3 150,000 55 Bidder # 4 200,000 53 Bidder # 5 250,000 51 Bidder # 6 300,000 49 What should be the firm’s IPO offer price? $57 $51 $52 $54 $55
Type of corporation Spandust Industries Inc. recently raised capital through an initial public offering (IPO). Its stock can now be purchased on the NYSE. This company is referred to as: A closely held corporation A publicly owned corporation Initial public offering performance When the demand for an initial public offering (IPO) of securities exceeds the number of securities issued, the offering is deemed to be: Undersubscribed Oversubscribed 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 $59 Bidder # 2 100,000 57 Bidder # 3 150,000 55 Bidder # 4 200,000 53 Bidder # 5 250,000 51 Bidder # 6 300,000 49 What should be the firm’s IPO offer price? $57 $51 $52 $54 $55
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
Spandust Industries Inc. recently raised capital through an initial public offering (IPO). Its stock can now be purchased on the NYSE. This company is referred to as:
A closely held corporation
A publicly owned corporation
Initial public offering performance
When the demand for an initial public offering (IPO) of securities exceeds the number of securities issued, the offering is deemed to be:
Undersubscribed
Oversubscribed
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 | $59 |
| Bidder # 2 | 100,000 | 57 |
| Bidder # 3 | 150,000 | 55 |
| Bidder # 4 | 200,000 | 53 |
| Bidder # 5 | 250,000 | 51 |
| Bidder # 6 | 300,000 | 49 |
What should be the firm’s IPO offer price?
$57
$51
$52
$54
$55
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