3.12 Methods Of Pricing The Issue

PRICING THE ISSUE : VARIOUS METHODS

  1. For Private Placement And BOD:
    • Negotiated Sale: The price of the underwriting and advisory services is agreed upon through negotiation between the investment banker and issuer. This is common in corporate bond issues.
    • Competitive Bid: The issuer solicits bids for the underwriting or sales function. This is common in issuance of municipal bonds.
  2. For IPO:
    • Fixed price or normal price.
    • Bidding and cut-off.
    • Whosoever bids the highest price would be given preference for allotment.
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Knowledge

Know what PEG ratio is!

Know what PEG ratio is!

PEG ratio is a company’s price/earnings ratio divided by its earnings growth...