"If the market values the shares of a company at 50 dollars, then the shares are worth 50. If the company receives $40 from the underwriter, then they are not are not receiving full value for their equity. So consistent with efficient market theory, the cost to them is $10"".;Question;If the firm floats an issue at $40 per share and it sells for $50 per share isn't the difference a net benefit to the firm?"
Issuing New Capital at $40 which sells in the market at $50. Is there a benefit?
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