Question: 6. Answer ALL the questions below. Define and critically discuss the Pecking Order Theory. [15 marks] Define and critically discuss the Initial Public Offering (IPO)

6. Answer ALL the questions below.

  1. Define and critically discuss the Pecking Order Theory.

[15 marks]

  1. Define and critically discuss the Initial Public Offering (IPO) and Seasoned Equity Offering (SEO).

[15 marks]

  1. What is the role of an Underwriter in IPO underpricing? Why do you think IPO underpricing happens? Critically discuss.

[15 marks]

  1. Critically discuss the following statement. An IPO and SEO is primary market while a private placement is secondary market.

[15 marks]

  1. Construct a unique example showing how a SEO can make existing shareholders lose wealth and new shareholders gain wealth.

[15 marks]

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