14.6 Initial Offering nitial Public Offering(Po)-first offering of stock to the general public Underwriter- Firm that buys an issue of securities from a company and resells it to the public Spread -Difference between public offer price and price paid by underwriter Prospectus- Formal summary that provides information on an issue of securities Underpricing -Issuing securities at an offering price set below the true value of the security Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 14- 6 Irwin/McGraw-Hill Initial Offering Initial Public Offering (IPO) - First offering of stock to the general public. Underwriter - Firm that buys an issue of securities from a company and resells it to the public. Spread - Difference between public offer price and price paid by underwriter. Prospectus - Formal summary that provides information on an issue of securities. Underpricing - Issuing securities at an offering price set below the true value of the security