The Koepka Co. and the Woods Co. have both announced IPOs at $49 per share....
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The Koepka Co and the Woods Co have both announced IPOs at $ per share. One of these is undervalued by $ and the other is overvalued by $ but you have no way of knowing which is which. You plan on buying shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled.
a If you could get shares in Koepka and shares in Woods, what would your profit beDo not round intermediate calculations.
b What profit do you actually expect? Do not round intermediate calculations.
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