Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 23, Problem 11P
Summary Introduction

To determine: The initial return on M Company and who all are benefited from the underpricing.

Introduction:

The private companies offer their stock for the first time to the public and this offering is termed as the initial public offerings. The private company that desire to become a publicly traded company usually offers the initial public offerings. The sale of the stocks below the true value is the underpricing.

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

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