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Instructions: - Recall the principal-agent problem found in corporations. The classic example is when the CEO (the agent) is allowed to make decisions on behalf of shareholders (the principal). Misalignment of incentives can lead to moral hazard and conflicts of interest. - Read the New York Times article titled "Why I.P.O.'s Get Underpriced" by Steven Davidoff Solomon, L 2 - Answer both of the questions listed below. - Engage in discussion with your classmates. You must respond to at least two posts. Discussion Questions: 1. In the context of the principal-agent problem, why do you think issuers/firms seem to be willing to raise equity capital at lower prices than the market is to pay? 2. If there was no principal-agent problem, what are some ways the CEO could mitigate IPO underpricing? Instructions: - Recall the principal-agent problem found in corporations. The classic example is when the CEO (the agent) is allowed to make decisions on behalf of shareholders (the principal). Misalignment of incentives can lead to moral hazard and conflicts of interest. - Read the New York Times article titled "Why I.P.O.'s Get Underpriced" by Steven Davidoff Solomon, L 2 - Answer both of the questions listed below. - Engage in discussion with your classmates. You must respond to at least two posts. Discussion Questions: 1. In the context of the principal-agent problem, why do you think issuers/firms seem to be willing to raise equity capital at lower prices than the market is to pay? 2. If there was no principal-agent problem, what are some ways the CEO could mitigate IPO underpricing

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