Which of the following is true of underpricing?
A) Underpricing occurs when the offer price is above the first closing price.
B) Underpricing occurs when the average daily return of the IPO is lower than the market return.
C) Underpricing is measured as the average initial returns measured over the first trading day.
D) Underpricing is measured as the percentage increase from the intrinsic value to the first closing price.
Correct Answer:
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