All of the following are supporting arguments in favor of IPO underpricing except which one?
A) Helps prevent the "winner's curse"
B) Rewards institutional investors who share their market value opinions
C) Reduces potential lawsuits against underwriters
D) Diminishes underwriting risk
E) Provides better returns to issuing firms

Question

Quizplus · Accepted Answer

All of the other choices are supporting arguments in favor of IPO underpricing, while E is not. It is actually a potential benefit to the issuing firm, as underpricing can lead to better returns for them.

All of the Following Are Supporting Arguments in Favor of IPO