Determine that will there be a positive demand for shares, Business Economics

Assignment Help:

Consider the economy (above) again where the following set of stocks is traded:

x1=(2,2,0)    x2=(1,0,3)  x3=(0,2,4)       

for the prices (p1, p2, p3)=(1, 1, 1).

Suppose a start-up company wants to go public. The firm has total costs of $10,000 at date t=1 and sales of $20,000 in state 1, $30,000 in state 2, and $100.000 in state 3. The firm wants to issue 1,000 IPO shares. (A share is endowed with a cash flow right of 0.1% of the total profits of the firm.) The underwriter suggests an IPO price of $26 per share. Will this IPO be successful, i.e. will there be a positive demand for the shares?


Related Discussions:- Determine that will there be a positive demand for shares

PRODUCTION, Importance of production.

Importance of production.

What are the disadvantages of informal economy, What are the disadvantages ...

What are the disadvantages of informal economy? Disadvantages of the informal sector are as illustrated below: • don’t pay direct taxes; • Can produce important pollutio

Define the implications of dependency problem, Define the implications of d...

Define the implications of dependency problem. Implications of dependency problem: To escape exploitation, underdeveloped countries should gain political, economic and so

Colonial background countries of the development process, What are colonial...

What are colonial background countries of the development process? A colony is a country controlled by other. Various European countries had extensive empires as: • Latin

Economic order quantity, A manufacturing company has determined from an an...

A manufacturing company has determined from an analysis of its accounting and production data for a certain part that : a. Its demand is 9000 units per annum and is uniform

MGT285, Ask quWhich one of the following is TRUE? a. Small changes in t...

Ask quWhich one of the following is TRUE? a. Small changes in the annual growth rate amount to a measurable difference in the long-term growth trend of a country. b. For ev

What is social inclusion, What is social inclusion? Social Inclusion:...

What is social inclusion? Social Inclusion: Social inclusion implies the whole of society enjoys the advantages of economic activity (as income) and have complete access

Long currency strangle, Speculating with Long Currency Strangle: A lon...

Speculating with Long Currency Strangle: A long currency strangle involves buying both a call option and a put option for a particular foreign currency with the same expiratio

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd