Why is it important that in an underwriting the investment banker does not overvalue (overprice) or undervalue (underprice) the securities? If the securities are overpriced or underpriced, who suffers the loss?

Why is it important that in an underwriting the investment banker does not overvalue (overprice) or undervalue (underprice) the securities? If the securities are overpriced or underpriced, who suffers the loss?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter8: Securities Law Considerations When Obtaining Venture Financing

Section: Chapter Questions

Problem 23DQ

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Why is it important that in an underwriting the investment banker does not overvalue (overprice) or undervalue (underprice) the securities?
If the securities are overpriced or underpriced, who suffers the loss?

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