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book building

Answer Posted / antra

It is a process wherein the issue price of a security is determined by the demand and supply forces in the capital market.
the procedure is-
the issuing company appoints a banker who in turn procure bids from the clients for the given security. After this,they analyse the demand of security at different price levels. Then the security is issued at the price level which had maximum bids or at the weighted average price level of all offers received.

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