Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 23.2, Problem 2CC
Summary Introduction

To determine: The mechanics of an auction IPO.

Introduction: Initial Public Offering (IPO) is a process where a company sells its share publically on the open market for the first time.

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What are the main costs associated with an initial public offering (IPO)?
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“Let's assume that you are an entrepreneur who organizes auction”   1) Which type of auction would you organize? Why?   2) Draw the utility functions of two individuals who are reluctant and willing to participate in this auction.   3) What would you do to transfer the risk in this auction?
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