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FIN 401 Lecture Notes - Lecture 19: Arm Cortex-M

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orangeminnow913
8 Jan 2018
School
Ryerson University
Department
Finance
Course
FIN 401
Professor
Kristyn Scott

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Document Summary

Costs of issuing securities: spread, other direct exp, indirect exp, abnormal returns, underpricing, overallotment option. Ipo ex: firms a and b have both announced ipos at per share. One of these is overvalued by and the other is undervalued by , but you have no way of knowing which is which. You plan on buying 1,000 shares of each issue. If an issue is underpriced, it will be rationed, and only half of your order will be filled. If receiving 1,000 shares of each stock profit = 1,000() issue expected profit = 500() 1,000() = this is an example of a (cid:498)winner"s curse(cid:499) in ipo: market. When the average investor (cid:498)wins(cid:499) and gets the entire allocation, it may be because those who knew better avoided the issue. takeover, white knight target firm seeks a competing bid from a friendly bidder) Chapter 1 financial ethics and corporate governance.

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Related Questions

The Woods Co. and the Garcia Co. have both announced IPOs at $43 per share. One of these is undervalued by $10, and the other is overvalued by $4, but you have no way of knowing which is which. You plan on buying 700 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled.


If you could get 700 shares in Woods and 700 shares in Garcia, what would your profit be? (Do not round intermediate calculations.)


Profit $


What profit do you actually expect? (Do not round intermediate calculations.)


Expected profit $

The Woods Co. and the Garcia Co. have both announced IPOs at $43 per share. One of these is undervalued by $10, and the other is overvalued by $4, but you have no way of knowing which is which. You plan on buying 700 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. If you could get 700 shares in Woods and 700 shares in Garcia, what would your profit be? (Do not round intermediate calculations.) Profit $ What profit do you actually expect? (Do not round intermediate calculations.) Expected profit $

The Woods Co. and the Mickelson Co. have both announced IPOs at $46 per share. One of these is undervalued by $12, and the other is overvalued by $5, but you have no way of knowing which is which. You plan to buy 1,100 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. If you could get 1,100 shares in Woods and 1,100 shares in Mickelson, what would your profit be? (Do not round intermediate calculations.)

What profit do you actually expect? (Do not round intermediate calculations.) Expected profit