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Case 2: Initial Public Offerings Lightning Corp. has recently completed its Initial Public Offering. The stock was offered at a price of $14 per share.
Case 2: Initial Public Offerings
Lightning Corp. has recently completed its Initial Public Offering. The stock was offered at a price of $14 per share. On the first day of trading, the stock closed at $19 per share.
- What was the initial return on Lightning Corp. stocks?
- Who benefited from this underpricing?
- Who lost from the underpricing, and why?
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