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2 weeks ago
What is the major reason that underwriters tend to offer stocks in an IPO at a price that is below that which the market will pay?

▸ to reduce their exposure to losses from unsold stock

▸ to benefit from greenshoe provisions

▸ to increase their spread

▸ to gain from the rise in value of any stocks they hold after the IPO
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
Authors:
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2 weeks ago
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to reduce their exposure to losses from unsold stock
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wrote...
2 weeks ago
Smart ... Thanks!
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