Why is underpricing not a great concern with bond offerings? Use the following information to answer the
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Why is underpricing not a great concern with bond offerings?
Use the following information to answer the question. Zipcar, the car-sharing company, went public in April 2011. Assisted by the investment bank Goldman, Sachs & Co., Zipcar sold 9.68 million shares at $18 each, thereby raising a total of $174.24 million. By the end of the first day of trading, the stock had zipped to $28 per share, down from a high of $31.50. Based on the end-of-day numbers, Zipcar shares were apparently underpriced by about $10 each, meaning that the company missed out on an additional $96.8 million.
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Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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