26
instead
of
a
single
price.
After
analyzing
the
demand
and
supply
of
the
shares,
the
underwriters
will
determine
and
fix
a
final
price.
Book
building
can
also
issue
additional
shares
up
to
15%
of
its
full
value.
This
however
will
expose
the
company
to a greater
risk
since
the
additional
shares
might not be fully sold (Benveniste
& Busaba,
1997).
Book
building
has
been
the
dominant
choice
in the
United
States
of
America financial market due to its many benefits.
There
are
many
benefits
in
using
book-building
method.
Book
building
method
allows
the
company
to
exercise
discretion
over
the
final
issue
size (Sherman,
2000).
Many
countries
have chosen
book
building
because
it
gives
better
and
more
accurate
valuation
in
the
value
of
the
company
(Kutsuna
&
Smith,
2003).
The
final
issue
size
can be set after the road shows to the
investors, and it does not have to
be finalized
before
submitting
the
initial
prospectus.
Book
building
method
also
allows
issuance
of
additional
share
up
to
15%,
when
the
demand
for the share are strong,
this benefits
will help the company
to
gain more capital (Benveniste
&
Busaba, 1997).
Book
Building
eliminates
the
possibility
of
a
winner’s
curse,
since
it
has
investor’s
valuation
within
the
offer
price,
therefore
most
of the
investors
will
be
well
informed
about
the
company.
This
is
a
benefit
to
both
issuer
and
investor
since
it
eliminates
information
asymmetry.
One
of
the
main
advantages
of
using
book-building
method
is
that
the
managing
underwriter
can choose
multiple
book
runners.
Having
multiple
book
runners
will
help
the
underwriting
firms
and
the
company
to
be
able
to
acquire
more
information
from
the
investors,
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