Final answer:
The purpose of a lockup agreement is to temporarily support the market price of IPO shares by preventing insiders from selling their stock immediately after an IPO, which helps to stabilize the stock's price. The correct option is A Temporary support of the market price of IPO shares
Step-by-step explanation:
The intended result of a lockup agreement is Temporary support of the market price of IPO shares. This contract typically restricts the company's insiders, including executives and investors, from selling their shares for a certain period after the company goes public. It's designed to prevent an oversupply of stock which could lead to a dramatic drop in price due to selling pressure.
By keeping supply limited, it helps stabilize the share price during the initial post-IPO period. A lockup agreement does not guarantee a minimum number of sold shares for an IPO (option B), nor directly involve the maximization of the return to a firm's original owners from an initial spike in the market price of IPO shares (option C).
It is not specifically intended to limit the price volatility caused by day trading (option D) or to increase the trading volume of shares for a recent IPO (option E). The correct option is A Temporary support of the market price of IPO shares