- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 4. Overview of Equity Securities
- Subject 3. Private versus Public Equity Securities
CFA Practice Question
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.
Correct Answer: Both are true.
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! |