The Offer Price of Shares in an IPO Is Generally

question 66

Multiple Choice

The offer price of shares in an IPO is generally less than the price those shares sell for at the end of the first trading day. Which of the following parties suffer most from this situation?

• A)The underwriters of the IPO.
• B)The pre-IPO shareholders of the issuing firm.
• C)The buyers of shares after the initial offering.
• D)The lead underwriter of the IPO.

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Definitions:

RERUN Process

A conflict resolution method that involves Recognizing the problem, Expressing feelings, Reflecting, Understanding both perspectives, and Negotiating solutions.

Reflect

The act of thinking deeply or carefully about something.

Reason

The mental faculty that is used to logically think through problems, make decisions, and establish conclusions based on evidence.

Stereotypes

Oversimplified and generalized beliefs or opinions about the characteristics, attributes, and behaviors of members of a particular group.