To the extent that shares sold during an IPO are discounted from their appropriate price, the proceeds that the issuing firm receives from the IPO are less than it deserves.

Question

Quizplus · Accepted Answer

During an IPO, if shares are sold at a discount from their appropriate market value, the issuing firm receives less capital than it would if the shares were sold at their full value. This is because the proceeds from the IPO are directly related to the selling price of the shares.

To the Extent That Shares Sold During an IPO Are