While not a direct loss to a venture, underpricing can represent a significant opportunity cost to the venture's owners. Question 3 options: True False

Respuesta :

Underpricing can represent a significant opportunity cost to the Venture's owners. The statement given is true.

What is Underpricing?

Underpricing refers to an event when a company going for Initial Public Offering(IPO) lists its price below its real value and such stock is said to be underpriced if on the first day of its trading, it closes above the set IPO price.

This relationship leads to an opportunity cost of issuance that eventually becomes stable over time, especially after controlling the features of offer.

Thus,The given statement is true.

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