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FBN Corporation has just sold 100,000 shares of stock in an initial public offering. The underwriter's explicit fee was $70,000. The offering price was $50
FBN Corporation has just sold 100,000 shares of stock in an initial public offering. The underwriter's explicit fee was $70,000. The offering price was $50 per share. In trading after the offer closed, the share price jumped to $53.
a. What is the cost to FBN of the IPO?
b. What is the profit to the underwriter?
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