What fraction of the firm is usually sold in an ipo

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Reference no: EM131241592

1. If shares in successful IPOs are oversubscribed by a factor of 3, and if offerings are equally likely to either appreciate or depreciate by about 15% on the first day of trading, what would you expect your rate of return to be without IPO underpricing, assuming fair rationing?

2. What fraction of the firm is usually sold in an IPO?

3. What are various reasons why IPOs are underpriced?

Reference no: EM131241592

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