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DRK, Inc., has just sold 240,000 shares in an initial public offering. The underwriter's explicit fees were $144,000. The offering price for the shares was

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DRK, Inc., has just sold 240,000 shares in an initial public offering. The underwriter's explicit fees were $144,000. The offering price for the shares was $32, but immediately upon issue, the share price jumped to $33.00. a. What is the total cost to DRK of the equity issue? Total cost b. Is the entire cost of the underwriting a source of profit to the underwriters? Yes O No

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