Generally,initial public offerings (IPOs)are:
A)overpriced.
B)correctly priced.
C)underpriced.
D)there is no general trend.

Question

Quizplus · Accepted Answer

Generally, IPOs are underpriced. This means that the issue price of the shares is set lower than the market price on the first day of trading, resulting in a surge in demand for shares and an increase in price. The underpricing is intended to create a buzz and hype around the company, generating interest and demand for shares. However, this can also result in leaving money on the table, as the company could have raised more money if the shares were priced higher.

Generally,initial Public Offerings (IPOs)are