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IPO Offer Price using Dutch Auction

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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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 ...

Solution Summary

Determines IPO Offer Price using Dutch Auction.

$2.19