Selling stockholders may receive a price well above current market or book value.

Name: Selling stockholders may receive a price well above current market or book value.
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Question

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When a company goes public, the initial public offering (IPO) may be priced at a premium to current market or book value, which means that selling stockholders can receive a price above those values. This is because the IPO price is typically based on the perceived potential for future earnings growth and market demand for the stock.

Selling Stockholders May Receive a Price Well Above Current Market