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Financial Management BUS 5111 - AY2021-T2University of the PeopleFinancial Management BUS 5111 - AY2021-T2Unit 6- Written AssignmentInstructor – Dr David Rogers24 December,2020
Financial Management BUS 5111 - AY2021-T2Describe the Initial Public Offering (IPO) process in the USA to include critical eventsand points-in-time.According to Nyse Ipo Guide (n.d.), the Initial Public Offering (IPO) in the United States, isthe initial issue of securities of a company to the general public and it is comprised of 5 steps which Iwill discuss below. The first step includes retaining financial advisors like, insurance brokers, lawyers,independent auditors, and investment banks, these will then provide relevant advice and assistance inthe process of acquiring an IPO. However, this process can drag up to 6 months before the IPO(Amadeo, 2019).Goldschmidt (2020), mentioned that the second step which occurs 3 months before the IPO,includes filing a registration statement and the distribution of a prospectus in line with the IPO. Thisregistration statement will address the business a company is involved in, as well as giving the riskfactors attached to the business and the company itself. There will also be the inclusion of the use ofrevenues from the offering. Furthermore, Nyse Ipo Guide (n.d.), mentioned that financial statementsand relevant documents that show financial results must be included in the registration andprospectus. Once the filing is complete, the SEC will check if all the information has been providedand assess whether the information provided is correct. This may take up to 30 days before gettingfeedback from them (Goldschmidt, 2020).In the next stage, the underwriters and the company will engage in a two to three weeksperiod of engaging with potential investors and making use of roadshows in order to market the IPO.All the financial information of the company will then be given to potential buyers and every investorwho buys the issued security, during the roadshow and the creation of this prospectors must be doneby the underwriter of the company (Amadeo, 2019).The fourth step is pricing, and it comes after the approval by the SEC, this is based on thevalue of the firm, and the SEC, in conjunction with the company will then set an effective date for theIPO (Amadeo, 2019). Securities can only be sold once the registration statement is declared effective
Financial Management BUS 5111 - AY2021-T2by the SEC and these securities are priced depending on the demand for securities. Also, to enable the

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