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A company plans to raise $100 million (This is the gross amount before costs come off.) through an IPO. The company sets the IPO
A company plans to raise $100 million (This is the gross amount before costs come off.) through an IPO. The company sets the IPO market price at $10.2 per share. The shares are underwritten at $9.3 per share. The out-of-pocket expenses are $630,000 in total. Upon the success of the IPO, the closing price at the end of the first trading day is $11.6 per share. Rounding requirements: For part a, do not include unit. Do not use comma separators. E.g. 123456. For part b,c and d, Round your answer to the nearest dollar. Do not include $. Do not use comma separators. E.g. 123456 a. Calculate the number of shares sold in the share offering. (1 mark) b. Calculate the total underwriting spread in dollars. (1 mark) $ c. Calculate the total underpricing of all shares sold in the share offering. (1 mark) $ d. Calculate the total cost for the IPO. (1 mark) 6
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