13. Issue costs (S14.2) In April 2019, Van Dyck Exponents offered 100 shares for sale in an IPO.

Half of the shares were sold by the company and the other half by existing shareholders, each of whom sold exactly half of their existing holding. The offering price to the public was $50, 426 Part Four Financing Decisions and Market Efficiency and the underwriters received a spread of 7%. The issue was heavily oversubscribed, and on the first day of trading, the stock price rose to $160.

a. What were the proceeds of the issue to the company? To the shareholders?

b. How much commission did the underwriters receive?

c. How much money was left on the table?

d. What was the cost of the underpricing to the selling shareholders?