Which of the following is true about the process of setting the offering price of an issue??
A. ?The offering price of the initial public offering of the stock of a privately held company is determined by a financial intermediary, whereas the offering price of the seasoned offering of a public company is determined by an investment bank.
B. ?An investment banker has an easier job of selling the issue if it carries a relatively high price.
C. ?An investment bank finds it easier to set the offering price of an initial public offering as compared to that of a seasoned offering.
D. ?An investment bank finds it easier to set the offering price of a seasoned offering of a private company as compared to a seasoned offering of a public company.
E. ?If the company is already publicly owned, the offering price will be based on the existing market price of the stock or the yield on the firm's existing bonds.
Answer: E
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