Determine that will there be a positive demand for shares, Business Economics

Consider the economy (above) again where the following set of stocks is traded:

x1=(2,2,0)    x2=(1,0,3)  x3=(0,2,4)       

for the prices (p1, p2, p3)=(1, 1, 1).

Suppose a start-up company wants to go public. The firm has total costs of $10,000 at date t=1 and sales of $20,000 in state 1, $30,000 in state 2, and $100.000 in state 3. The firm wants to issue 1,000 IPO shares. (A share is endowed with a cash flow right of 0.1% of the total profits of the firm.) The underwriter suggests an IPO price of $26 per share. Will this IPO be successful, i.e. will there be a positive demand for the shares?

Posted Date: 3/23/2013 2:27:22 AM | Location : United States







Related Discussions:- Determine that will there be a positive demand for shares, Assignment Help, Ask Question on Determine that will there be a positive demand for shares, Get Answer, Expert's Help, Determine that will there be a positive demand for shares Discussions

Write discussion on Determine that will there be a positive demand for shares
Your posts are moderated
Related Questions
two political party called hawks show apoint ppf that the hawks might choose and a point the doves might choose

(a) Show the importance of Non Profit Organisations in Small Island Economies. (b) Show the importance of Foreign Direct Investment in Small Island Economies. Comment on th

What is suitable technology? Technology is suitable when this employs methods which make the best use of accessible resources that is labour-intensive, straightforward techniqu

How would you assess the significance of sales skills to a project manager? Are they, increasing or decreasing in your view, significance? Why do you think there is this change occ

Question 1: Write short notes on any FOUR of the following: (equal marks each) (a) Law of diminishing returns (b) Barriers to entry (c) Consumption Function (d) Devaluati

QUESTION (a) Discuss whether international trade between countries is always beneficial. (b) What are the economic reasons for protectionism? (c) Does the National Income

An agent has a utility function over goods 1 and 2 of the form U = x c 1 x d 2 where c is your 1- digit number and d is your minimum number. The agent's income is equal to you

Why do markets work into promoting development? Liberal economists dispute a free market economy works since this gives incentives for self-generating growth. Particularly the

Do all developing economies have same underlying problems? Less developed countries are similar but exceptional. The impact of a problem will vary depending upon circumstances

PROBLEMS OF LOWER INCOME COUNTRIES There are vast income and wealth disparities in world we live in. Approximately one-fourth of the world’s population accounts for the three-f