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    IPO Initial Public Offering

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    Explain how the Initial Public Offering (IPO) process works and its positive and negative aspects. Who benefits? How effective is the transfer of capital from savers to users (how much lost in the process)? Does the Dutch auction IPO represent an improvement over the traditional IPO? Explain your point of view using examples.

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    Solution Preview

    IPOs, also known as Initial Public Offerings happen with private companies take themselves public to raise capital. IPOs can be risky because the first day of trading is not predictable.

    IPO Basics

    For a company to go public, it must first be private. Walt Disney, MGM and Estee Lauder are all publicly traded companies. All of these companies are traded publicly and have their own stock ticker. Every company that is traded has their own ticker to identify themselves from the others being traded. Companies go public to expand their business through wealth. The only way to expand a business is to increase ...

    Solution Summary

    The solution discusses the IPO process, positive and negative aspects and who benefits.