The bookbuilding method used by almost all IPOs in the United States is like an auction,since potential buyers indicate how many shares they are prepared to buy at given prices.

Question

Quizplus · Accepted Answer

The bookbuilding method, also known as the Dutch auction method, is similar to an auction as potential buyers indicate how many shares they are willing to buy at different price levels. The offering price is then set based on the level of demand and the price at which all the shares can be sold.

The Bookbuilding Method Used by Almost All IPOs in the United