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
How can trade agreements assist development? A trade agreement is while two or more countries to by decrease or abolish tariffs, non-trade and quotas barriers which are establ

Persuading someone to buy is a complicated process. Why is it? Is the process inherently difficult, or is it since so many people are included? Persuading is an affecting skill

Select an organization and discuss what type of information should be protected in a BIA plan. How would you ensure protection of the confidentiality of such information and preven

Find quantity supplied and quantity demanded: Suppose there are 300 used cars, with 3 quality levels: bad, medium, and good.  A seller knows the quality of his car but a buyer

QUESTION (a) Explain what factors might determine the level of investment in an economy. (b) ‘If investment increases it will cause an increase in income. If income increase

Can less developed countries economies grow by developing its primary sector as agriculture? Less developed countries economies can grow by developing its primary sector as ag

Is population growth a problem? Quick population growth is a main cause of poverty and arises where population growth go beyond the rate of economic growth. Standards of liv

How is the installation and commissioning affects the IS project? Installation and commissioning: This stage of a project is frequently either forgotten or underestimated

Yanni works for Woolworths Limited (WOW) and owns 5,000 Woolworths shares that he received in lieu of a bonus five years ago. Woolworths has reported an NPAT of $1.294 billion and

What is urbanisation? Urbanisation arises while an increasing proportion of the population live into cities, suburbs or towns. All cities are attractive to potential migrants s