What are the total costs of going public for XYZ from Problem 1 as a percentage of the total pre-cost equity value? In calculating the pre-cost equity value, use the closing price of the stock at the end of the first day as the pre-cost equity value.

Data From Problem 1

A company is going public at $16 and will use the ticker XYZ. The underwriters will charge a 7 percent spread. The company is issuing 20 million shares, and insiders will continue to hold an additional 40 million shares that will not be part of the IPO. The company will also pay S 1 million of audit fees, $2 million of legal fees, and $500,000 of printing fees. The stock closes the fust day at $ 19.