Question
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.
a. What was the initial return on Lightning Corp. stocks?
b. Who benefited from this underpricing?
c. Who lost from the underpricing, and why?
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Teaching Public Budgeting And Finance
Authors: Meagan M. Jordan, Bruce D. McDonald III
1st Edition
1032146680, 978-1032146683
