What Is an Issue Price?
The price at which publicly issued stocks and bonds are sold to investors. This price is mostly negotiated between the underwriting syndicate and the issuer based on market conditions. Because the issue price is fixed, it is sometimes called a fixed price. The stock issue price refers to the price at the time of public offering of shares.
Issue price
discuss
- Chinese name
- Issue price
- Application
- Stock securities
- The price at which publicly issued stocks and bonds are sold to investors. This price is mostly negotiated between the underwriting syndicate and the issuer based on market conditions. Because the issue price is fixed, it is sometimes called a fixed price. The stock issue price refers to the price at the time of public offering of shares.
- The offering price is another: fixed price; guaranteed price
- However, the issue price is always higher than the net asset price, and the reason is simple, because the purpose of listing is to finance the enterprise. For example, if a company has a net asset of 5 yuan per share and an issue price of 8 yuan, then the 3 yuan of 8-5 is multiplied by the total number of shares issued, which is the funds raised when the company is listed and can be used for the development of the company. It is a capital provident fund.
- Therefore, if the issue price is set low, the purpose of the company's listing and financing cannot be achieved, and the significance of listing is lost. However, if the issue price is set too high, no one is willing to buy it, and it will not be able to finance it. Therefore, according to the market's ability to accept, with reference to the market prices of similar companies, and after considering various factors, a compromise price is set to meet the needs of financing and be acceptable to the market.