Question: c) Explain why a startup might choose to issue equity instead of debt. Describe the nature of the equity. [Hint: When you supply financing (debt

c) Explain why a startup might choose to issue equity instead of debt. Describe the nature of the equity. [Hint: When you supply financing (debt or equity) to a firm, what make it pay you back?] (6 marks)

d) Define what is meant by the statement that the typical IPO is underpriced. Provide THREE possible explanations for IPO underpricing.

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