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Old 10-12-2004, 09:55 PM  
buddyjuf
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Quote:
Originally posted by JakeR
the underwriting bank sets the price, as they are the ones issuing it to the public. Lets say Lehman Brothers wants to take company X public, they evaluate the company at around 32$/share, they pay company 28$/share, and then unload the stocks to the public. They acquire the shares at a discount because they are taking the risk of underwriting the stock.
but how does the bank evaluate the money? what aspects of the company make the bank set that specific price?

can they value a stock at more than the company is worth in assets? (company is worth 500 000$, they releast 2.5 million $ of shares)
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