Problem 15.01 – IPO Underpricing Koepka Co
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Two companies Woods Co. and Koepkta Co. (Or Johnson Co) have announced IPOs at the same price. One is undervalued and the other is overvalued, but it is unknown which is which. If you plan to purchase a certain number of shares of each company, determine your profit, and finally, state the principle illustrated by this situation.
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