Generally initial public offerings (IPOs) are:
A) Overpriced
B) Correctly priced
C) Under priced

Question

Quizplus · Accepted Answer

Generally, IPOs are underpriced to generate interest from investors and to provide an initial boost in stock price. This is because companies issuing IPOs want to create a positive momentum around their stock and attract investors. Studies have shown that on average, IPOs are underpriced by around 15-20%. However, there are always exceptions to this trend and some IPOs may be correctly or even overpriced.

Generally Initial Public Offerings (IPOs) Are