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DRK, Inc., has just sold 50,000 shares in an initial public offering. The underwriter's explicit fees were $30,000. The offering price for the shares was
DRK, Inc., has just sold 50,000 shares in an initial public offering. The underwriter's explicit fees were $30,000. The offering price for the shares was $70, but immediately upon issue, the share price jumped to $71.00. 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
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