If the price of an initial public offering of stock rises, the windfall gain goes to the firm selling the securities.

Question

Quizplus · Accepted Answer

The windfall gain from the rise in the price of an initial public offering (IPO) of stock goes to the investors who purchase the IPO shares and sell them at a higher price, not directly to the firm selling the securities. The firm receives the proceeds from the initial sale of the shares at the offering price.

If the Price of an Initial Public Offering of Stock