Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is going public at $15 and will use the ticker XYZ. The underwriters will charge a 7 percent spread. The company is issuing

image text in transcribed
A company is going public at $15 and will use the ticker XYZ. The underwriters will charge a 7 percent spread. The company is issuing 19 million shares, and insiders will continue to hold on additional 38 milion shares that will not be part of the IPO. The company will also pay $2.5 milion of audit fees, S4 milion of legal fees, and $800,000 of printing toes. The stock closes the first day at $18. Answer the following questions: At the end of the first day, what is the market capitalization of the company Enter your answer in millions. For example, an answer of $1.2 minon should be entered as 12, not 1,200,000. Do not round intermediate calculations, Round your answer to one decimal place 5 million b. What are the total costs of the offering? Include underpricing in this calculation. Enter your answer in millions. For example, an answer of $1.2 milion should be entered at 1.2. not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place million 5

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 6th Edition

324664559, 978-0324664553

More Books

Students also viewed these Finance questions

Question

What is the value of the coefficient of determination (R2)?

Answered: 1 week ago