Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A biotechnology company , Keros TherapeuticsKeros Therapeutics , completed its IPO on April 8 , 2 0 2 0 2 0 2 0 , and

A biotechnology company, Keros TherapeuticsKeros Therapeutics, completed its IPO on April8,20202020, and listed on the Nasdaq. KerosKeros sold 6 comma 000 comma 0006,000,000 shares of stock to primary market investors at an IPO offer price of $ 17.14$17.14, with an underwriting discount of 6.16.1%. Secondary market investors, however, were paying $20.9420.94 per share for KerosKeros'19 comma 189 comma 39119,189,391 shares of stock outstanding (which includes the newly-issued shares).
a. Calculate the total proceeds for KerosKeros' IPO.
b. Calculate the dollar amount of the underwriting fee for KerosKeros' IPO.
c. Calculate the net proceeds for KerosKeros' IPO.
d. Calculate market capitalization for KerosKeros' outstanding stock.
e. Calculate IPO underpricing for KerosKeros' IPO.
f. Explain the IPO underpricing for KerosKeros.
Question content area bottom
Part 1
a. The total proceeds for KerosKeros' IPO is $enter your response here. (Round to the nearest dollar.)
Part 2
b. The dollar amount of the underwriting fee for KerosKeros' IPO is $enter your response here. (Round to the nearest dollar.)
Part 3
c. The net proceeds for KerosKeros' IPO is $enter your response here. (Round to the nearest dollar.)
Part 4
d. KerosKeros' market capitalization is $enter your response here. (Round to the nearest dollar.)
Part 5
e. KerosKeros' IPO underpricing is enter your response here%.(Round to two decimal places.)
Part 6
f. Explain the IPO underpricing for KerosKeros.
"Positive underpricing indicates that secondary-market investors were willing to pay more for the company's shares than the IPO offer price that the shares were sold for in the primary market."

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Management

Authors: Eugene F. Brigham, Joel F. Houston

Concise 10th Edition

1337902578, 978-1337902571

More Books

Students also viewed these Finance questions