Series 79 practice questionmediumStabilization
In an IPO, what is the maximum price at which underwriters may stabilize the stock in the aftermarket under Regulation M?
- AAny price below the IPO price
- BAt any price in the open market
- CLesser of IPO price or last independent trade✓ Correct answer
- DAt or above the closing price on the first day
Explanation
Why C — Lesser of IPO price or last independent trade
The offering price is a ceiling, but Rule 104 can impose the lower last-independent-transaction ceiling.
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