IPO Underpricing: When Geo Corp

question 81

Multiple Choice

IPO underpricing: When Geo Corp. went public in September 2008, the offer price was $19.00 per share and the closing price at the end of the first day was $24.70. The firm issued 4 million shares. What was the loss to the company due to underpricing?

• A) $13.6 million
• B) $20.83 million
• C) $20.6 million
• D) $22.8 million

---

Definitions:

Uncertainty

The lack of certainty or predictability about the outcome of an event, often requiring risk management strategies.

Competitive Strategy

A planned method of positioning a company in the market and gaining an edge over competitors, often by analyzing strengths, weaknesses, opportunities, and threats.

Customer Needs

The desires or requirements of buyers that drive their purchase decisions, including product features, price, quality, and convenience.

Inventory

The stock of any item or resource used in an organization, including raw materials, components, and finished products.