Question

Compare the Dutch auction with the standard underwriting of new shares by investment bankers.

Compare the Dutch auction with the standard underwriting of new shares by investment bankers.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In Dutch auction, there is no pre price set for the shares in the IPO while in standard underwriting the investment bankers invest based on the price fixed by the company for the IPO based on various valuations. In Dutch auction, based on the bid received for the price the highest bidders are allotted the shares and than the others based on available shares. While in standard underwriting the investment bankers subscribe to the shares which are not taken under IPO based on the price fixed.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
meaning of dutch auction underwriting ?
meaning of dutch auction underwriting ?
Northern Air would like to sell 4,500 shares of stock using Dutch auction underwriting. The bids...
Northern Air would like to sell 4,500 shares of stock using Dutch auction underwriting. The bids received are: Bidder Quantity Price A 950 $ 29.50 B 1,050 29.15 C 1,450 29.00 D 1,650 28.65 E 1,850 28.45 How much will the company raise in its offer? Ignore all flotation and transaction costs.
Northern Air would like to sell 4,300 shares of stock using Dutch auction underwriting. The bids...
Northern Air would like to sell 4,300 shares of stock using Dutch auction underwriting. The bids received are: Bidder Quantity Price A 850 $ 29.40 B 950 29.05 C 1,350 28.90 D 1,550 28.55 E 1,750 28.35 How much will the company raise in its offer? Ignore all flotation and transaction costs. Multiple Choice $170,115 $124,915 $126,420 $122,765 $124,270
1- Which of the following statements is false regarding the mechanism of the Dutch auction underwriting...
1- Which of the following statements is false regarding the mechanism of the Dutch auction underwriting a) The bidder who gives the lowest price has a high probability of buying the company's shares. b) The bidder who gives the highest price has a low probability of buying the company's shares. c) The bidder who gives the highest price has a high probability of buying the company's shares. d) The bidder who gives the lowest price has a low probability of...
the primary activity of ____ is underwriting investment bankers the wall street journal securities and exchange...
the primary activity of ____ is underwriting investment bankers the wall street journal securities and exchange commission the new york stock exchange
Under a Dutch auction, the company pays the same price to repurchase the shares of stock....
Under a Dutch auction, the company pays the same price to repurchase the shares of stock. True False
In its negotiations with its investment bankers, Patton Electronics has reached an agreement whereby the investment...
In its negotiations with its investment bankers, Patton Electronics has reached an agreement whereby the investment bankers receive a smaller fee now (6% of gross proceeds versus their normal 10%) but also receive a 1-year option to purchase an additional 200,000 shares at $5.00 per share. Patton will go public by selling $5,000,000 of new common stock. The investment bankers expect to exercise the option and purchase the 200,000 shares in exactly one year, when the stock price is forecasted...
Assume UBER makes 1,875,000 shares available to investors through a Dutch Auction IPO. The following orders...
Assume UBER makes 1,875,000 shares available to investors through a Dutch Auction IPO. The following orders have been listed below. What is the IPO price? How many shares does each investor get? Investor Bid Amount Bid Shares Paulina $325,000 5,000 Nina $43,500 28,000 Joanna $12,750 522,000 Jen $4,250 650,000 Tina $1,600 300,000 Jo $725 420,000 Morgan $550 950,000 · What is the IPO price?    · How many shares does each investor get? · How much money does UBER get?
Recently Snowflake, Inc. had an IPO. The lead underwriter purchased all of the shares of Snowflake...
Recently Snowflake, Inc. had an IPO. The lead underwriter purchased all of the shares of Snowflake and resold them to the public. This is an example of ___________________ .   A. a firm commitment underwriting B. deploying capital C. a Dutch auction IPO D. a Seasoned Equity Offering E. a best efforts underwriting
JupiterX (JX) went public and used the Dutch auction to set the offer price for 30...
JupiterX (JX) went public and used the Dutch auction to set the offer price for 30 million shares. The following table gives the bidding. The stock traded at $100 at the end of trading on the first day. What is the percent underpricing? Bidder Price ($) Number of Shares (millions) B1 110 5 B2 90 10 B3 80 20 B4 75 30 A. 20.0% B. 25.0 % C. 33.3% D. 67.7%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT