Question
JF Corporation issued 2M shares through an IPO reflecting 30% ownership of the firm. The other 70% are owned by original investors. The offer price
JF Corporation issued 2M shares through an IPO reflecting 30% ownership of the firm. The other 70% are owned by original investors. The offer price was $5 and each share jumped to $10 by the end of the trading day reflecting JF Corporation's true intrinsic value. What is the original shareholders' wealth if the IPO is fairly valued?
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Analysis for Financial Management
Authors: Robert C. Higgins
10th edition
007803468X, 978-0078034688
