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$2.25 Ipos and dividends

  • From Economics: General-Economics
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  • Due on Aug. 26, 2012
  • Asked on Aug. 22, 2012 at 11:58:54AM
Asked by :
rosey58
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Q:

 A US firm wants to raise $15 million by selling 1 million shares at a net price of $15 a share. We know that some say that firms " leave the  money on the table" because of the phenomenon of underpricing.

a. Using the average amount of underpricing in US IPO's, how many fewer shares could it sell to raise thes funds if the firm received a net price per share equal to  the value of the shares at the end of first day of trading.

b.How many less shares could it sell if the IPO was occuring in Germany

c. How many less less shares could it sell if the IPO was occuring in Korea?

d. How many less shares  could it sell if the IPO was occuring in Canada

 

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  • Posted on Aug 22, 2012 at 12:26:34PM
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benssalem1
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A:
Preview: ... .169 = $17.54 So for $15M, No of  shares  issued will be $15M/ $17.54 = 855,432 b. How  many  less  shares   could  it  sell   if  the IPO was occurring in Germany? For Germany,  AMount  left on Table is 26.9%. So  Share  Issue  price   could  h ...
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