In a public distribution, the dealer group will generally pay a
A) higher price for the stock than the public.
B) lower price for the stock than the managing investment banker.
C) higher price for the stock than the managing investment banker.
D) lower price for the stock than members of the investment banking syndicate group.

Question

Quizplus · Accepted Answer

In a public distribution, the dealer group typically pays a higher price for the stock than the managing investment banker. This is because the managing investment banker often sells the stock to the dealer group at a slight discount to facilitate the distribution process and incentivize the dealers to participate in the selling effort.

In a Public Distribution, the Dealer Group Will Generally Pay