When Wildhorse went public in September 2016, the offer price was $22.00 per share and the...
When Wildhorse went public in September 2016, the offer price was $22.00 per share and the closing price at the end of the first day was $23.70. The firm issued 5.3 million shares. What was the loss to the company due to underpricing?
Homework Answers
Change in price on first day = $23.70 - $22.00 = $1.70
Number of shares outstanding = 5.3 million
Loss due to underpricing = $1.70 × 5,300,000 = $9,010,000
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