When investment banks underwrite IPOs, they typically sell stock for 5-10 percent more than they pay for

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When investment banks underwrite IPOs, they typically sell stock for 5-10 percent more than they pay for it. When they underwrite new stock for companies that are already public, the typical markup is 3 percent. What explains this difference?

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Money Banking and Financial Markets

ISBN: 978-1429244091

2nd edition

Authors: Laurence M. Ball

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Question Posted: Dec 05, 2015 03:41 AM

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When investment banks underwrite IPOs, they typically sell stock for 5-10 percent more than they pay for

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The process of underwriting an IPO initial public offering is quite costly for the investment ba...View the full answer

Money Banking and Financial Markets

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