Offering price can be defined as the price that is offered for the publicly issued securities. These publicly issued securities are presented for purchase by the investment banks underwriting the issue. The offering price of a publicly issued security also includes the fee of underwriter and the management fee that is applied to the offering price of the public security. The offering price of the security is determined by the underwriter and a number of factors are analyzed by the underwriting team before deciding the price of the publicly issued securities. The ideal situation is that when an investment bank precisely and accurately assess the price of the public security. The underlying firm must also asses the price of the publicly issued securities in a perfect manner so that they can accurately offer the price of the securities that can be used by the underlying firm to raise funds for the issuing company. These securities are the sold to the investors at a fair price.
The objective of the offering price raise money for the issuing company to raise funds that is why the price of the public offering is kept alluring for the investors who want to purchase securities of issuing company. The factors that are keenly observed by the underlying firm regarding the issuing company include the financial status of the issuing company and the financial performance of the company. The other name of the offering price is the fixed price.
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