A firm conducting an IPO of common stock sold 1 million new shares in the offering at an offer price of $10 per share. After the offering, the firm had 5 million shares outstanding, and the price of those shares in the secondary market was $12. The firm's IPO was underpriced by ________.

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Part 1

A.

100%

B.

20%

C.

0%

D.

16.7%