TulipCo recently went public using a Dutch auction. The comp…

TulipCo recently went public using a Dutch auction. The company wanted to sell 10 million shares. The bidding is given in the table below.  What is the IPO price and what is the percent underpricing if the price at the end of trading on the first day is $125? (as a percent of the IPO price) Investor Price Bid Number of shares bid 1 150 2 2 130 3 3 120 4 4 110 4 5 100 5 6 90 7

Which of the following statements is (are) true? (1) The pec…

Which of the following statements is (are) true? (1) The pecking order theory of capital structure implies that when a firm uses external finance it means that the firm did not have enough abundantinternal finance. (2) The trade-off theory suggests that holding other things constant, firms respond to a decrease in tax rate by issuing less debt. (3) When equity income is taxed less heavily than interest income, which is usually the case in real world, then the tax benefit of using debt is reduced compared with when there’s only corporate tax . (4) According to Modigliani and Miller, if capital markets are efficient without any forms of imperfection, there are no taxes and there are no costs of bankruptcy, then managers should not take capital structure into account while making decisions.