Question

Which of the following statements about IPOs is/are not correct? 1)It provides a company access to funds through the public capital market. 2)Companies issue IPOs to raise funds from the public and become publicly traded companies. 3)In a book-building issue, the exact price of the share is unknown, but investors are given a price band or range.

Q: Answer-Which of the following statements about IPOs is/are not correct? 1)It provides a company access to f...

Statement 1 is correct as it provides a company access to funds through the public capital market. Statement 2 is also correct as companies issue IPOs to raise funds from the public and become publicly traded companies. Here are the key differentiating factors between the two types of IPO. Price In a fixed price issue, the price of the shares is fixed before the issue. In a book-building issue, the exact price of the share is unknown, but investors are given a price band or range within which they can place bids.