A firm just announced the issue of 100,000 shares through a new SEO. Which one of the following statements is more correct?

Multiple Choice

• The cost of the SEO far exceeds the cost of the IPO

• The companys stock price on average declines because the SEO indicates the firm has run out of profitable investments

• The companys stock price on average declines because the company is likely overvalued

• The companys stock price on average declines because issuing public securities increases the risk of bankruptcy

• None of the above