Felix Corporation has just gone public. Under a firm commitment agreement, Felix received 45 for each of the 446.6 million shares sold. The initial offering price was 47 per share, and the stock rose to 56.50 per share by the end of the first day of trading. Felix also paid 45.5 million in direct legal fees.

What were the direct costs of the issue? What were the costs of underpricing? What were the total costs (direct costs plus underpricing) as a proportion of the market value of the shares? Discuss advantages and disadvantages of a company going public. Explain why public companies may wish to go private.