Felton Publishing recently completed its IPO. The stock was offered at $ 13.53 per share. On...
Felton Publishing recently completed its IPO. The stock was offered at $ 13.53 per share. On the first day of trading, the stock closed at $ 19.52 per share. a. What was the initial return on Felton? b. Who benefited from this underpricing? Who lost, and why?
Homework Answers
1.
=19.52/13.53-1=44.2720%
2.
Investors who were able to buy at 13.53 and Investment Banks
benefitted
Original shareholders lost
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