Module Code: ACCA 33325: Explain what is meant by underpricing in the context of an IPO and critically assess whether or not the two companies’ shares were under-priced when their IPOs happened.
Word Count: The total maximum word count for this paper is: 1,200 words (excluding calculations, tables, charts or tables, and as well as words and formulae contained within calculations, tables, charts and diagrams)
The following penalties will be applied, if the Examination word count is exceeded.
Additional words up to 350 words, the overall grade for the piece of work will be reduced by 1 grade point (e.g. UG 2.1-Mid to 2.1-Low; PG Commendation-Mid to Commendation-Low);
Additional words of more than 350 words, the overall grade for the piece of work will be reduced by 3 grade points (e.g. 2.1-Mid to 2.2 Mid; PG Commendation-Mid to Pass-Mid).
These penalties will be applied even if the reduced grade is below a Pass grade.
You are advised to submit work that is as close to the maximum word count as is practical to enable you to demonstrate that you have met all the module learning outcomes.
All non-narrative elements included in the work that require a written description ARE EXCLUDED from the word count. These include: calculations, tables, charts or diagrams, as well as words and formulae contained within these elements.
Citing and Referencing Requirements:
In-text citations are encouraged.
NO reference list in Harvard style is required.
Appendices should NOT be submitted and will NOT be graded.
Distribution of Marks and Word Count for Sections.
Below you will find, for each section, the distribution of marks and approximate suggested word count.
Section
Number of questions to be answered
Marks available for this section
Approximate word count for this section (related to the discursive elements of the section)
A
Answer 1 compulsory question
20
700
B
Answer 1 compulsory question
20
280 (Part (c))
C
Answer 1 compulsory question
20
220 (part (c))
Maximum words
1200
END OF INSTRUCTIONS
ANSWER ALL FIVE QUESTIONS
SECTION A: QUESTION ONE
In October 2013, Royal Mail shares were floated through an Initial Public Offering (IPO). In May 2011, Glencore was part-floated through an IPO. Both companies’ shares were listed on the London Stock Exchange.
REQUIRED
Explain what is meant by underpricing in the context of an IPO and critically assess whether or not the two companies’ shares were under-priced when their IPOs happened.
(10 marks)
