What should the firms ipo offer price be


Problem:

Sampras Inc. is going public and issuing 500,000 shares of common stock. The capital raised in the IPO will be used to fund the company's proposed expansion. A Dutch auction is being used to allocate shares in the Sampras inc. The bids for shares are shown below:

Number of shares requested Price
50,000 $56
100,000 $54
150,000 $52
200,000 $50
250,000 $48
300,000 $46

What should the firm's IPO offer price be?

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Finance Basics: What should the firms ipo offer price be
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