Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following simplified auction in an IPO. The offer size is 30 million shares. The investment bank managing the auction deems a 2832 a
- Consider the following simplified auction in an IPO. The offer size is 30 million shares. The investment bank managing the auction deems a 2832 a correct price range. The order book is reported in following table:
Bidder | Price () | No. Of shares (in ml) |
A | 28.0 | 15.0 |
B | 30.0 | 8.0 |
C | 31.0 | 8.0 |
D | 29.0 | 12.0 |
E | 30.0 | 6.0 |
F | 32.0 | 5.0 |
G | 31.5 | 7.0 |
H | 29.0 | 10.0 |
I | 30.5 | 3.0 |
- Assuming a uniform price action: please, state what are the winning bids, the amount of money allocated to each bid (percentage of allocation), the overall amount collected by the issuer.
- Assuming a discriminatory price action: state what are the winning bids, the price paid by each bid and overall amount collected by the issuer.
- Assuming a discriminatory price action, please, explain which bidder is the real winner?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started