Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem 13P
What is IPO underpricing? If you decide to try to buy shares in every IPO, will you necessarily make money from the underpricing?
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Students have asked these similar questions
Why would so many people invest in a company like AFCO? What could investors have done to prevent themselves from falling into investment schemes such as this?
Many companies that go public with an IPO don’t actually need additional cashto continue growing their operations. Why might such a firm decide to go public?
Which of the following is true regarding IPO pricing?
Answers:
Underpricing is more popular which hurts the firm
Underpricing is more popular which hurts the investment bank
Overpricing is more popular which hurts the firm
Overpricing is more popular which hurts the investment bank
Chapter 23 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 23.1 - Prob. 1CCCh. 23.1 - Prob. 2CCCh. 23.2 - Prob. 1CCCh. 23.2 - Prob. 2CCCh. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CCCh. 23.4 - Prob. 1CCCh. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1PCh. 23 - What are the advantages and the disadvantages to a...
Ch. 23 - Prob. 3PCh. 23 - Suppose venture capital firm GSB partners raised...Ch. 23 - Prob. 5PCh. 23 - Prob. 6PCh. 23 - Prob. 7PCh. 23 - Prob. 8PCh. 23 - Prob. 9PCh. 23 - Prob. 10PCh. 23 - Prob. 11PCh. 23 - Prob. 12PCh. 23 - What is IPO underpricing? If you decide to try to...Ch. 23 - Prob. 14PCh. 23 - Prob. 15PCh. 23 - Prob. 16PCh. 23 - Prob. 17PCh. 23 - Prob. 18PCh. 23 - Prob. 19PCh. 23 - Prob. 20P
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- Are synthetic CDOs a legitimate business investment, or are they pure gambling? If the former, what are their benefits? If the latter, should banks and other companies be allowed to wager on whatever they want if they like the odds and think they can make money that way?arrow_forwardWhat are the main costs associated with an initial public offering (IPO)?arrow_forwardIs this statement true or false? Give a reason for your answer. "The homemade dividend strategy argues that investors impose their dividend preference on the firm."arrow_forward
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