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Basic Question 2 of 6
Which statement(s) is (are) true regarding private investment in public equity (PIPE)?
II. PIPEs are often highly dilutive and destructive to the existing shareholder base.
I. PIPEs are attractive to some investors because the shares can be purchased at a discount to the public market price.
II. PIPEs are often highly dilutive and destructive to the existing shareholder base.
User Contributed Comments 2
| User | Comment |
|---|---|
| khalifa92 | is it because they are sold @ discount? |
| Antoinepo | Often they will use debt leverage while doing an acquisition, which dilute the equity! |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
compare and contrast public and private equity securities
CFA® 2024 Level I Curriculum, Volume 3, Module 4.