Question
The Bread.Com Co. just had an Initial Public Offering (IPO). The company sold all the shares to an underwriter at $10 per share. On the
The Bread.Com Co. just had an Initial Public Offering (IPO). The company sold all the shares to an underwriter at $10 per share. On the day of the IPO, the underwriter sold the common stocks to investors at the offer price of $11 per share. At the end of the offer date, the stocks were traded at $15 per share.
Show work on both answers
(a)What is the percentage underwriter spread for this stock?
(b)Calculate the percentage of IPO underpricing for the Bread.Com
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
6th Edition
0077211332, 9780077211332
