Why is underpricing not a great concern with bond offerings?
Use the following information to answer the next three questions. Zipcar, the car sharing company, went public in April 2011. Assisted by the investment bank Goldman, Sachs & Co., Zipcar sold 9.68 million shares at $18 each, thereby raising a total of $174.28 million. By the end of the first day of trading, the stock had zipped to $28 per share, down from a high of $31.50. Based on the end-of-day numbers, Zipcar shares were apparently underpriced by about $10 each, meaning that the company missed out on an additional $96.8 million.