Underpricing represents the difference between the aftermarket stock price and the initial offering price.

Name: Underpricing represents the difference between the aftermarket stock price and the initial offering price.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Underpricing is the difference between the aftermarket stock price (the price at which the stock trades on the open market after the IPO) and the initial offering price (the price at which the shares were initially offered to investors). Therefore, the statement is true.

Underpricing Represents the Difference Between the Aftermarket Stock Price and the Initial