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Hi, I have a few questions with my financial homework When Microsoft went public, the company sold 2 million new shares (the primary issue). In
Hi, I have a few questions with my financial homework
- When Microsoft went public, the company sold 2 million new shares (the primary issue). In addition, existing shareholders sold .8 million shares (the secondary issue) and kept 21.1 million shares. The new shares were offered to the public at $21, and the underwriters received a spread of $1.31 a share. At the end of the first day's trading the market price was $35 a share.
- How much money did the company receive before paying its portion of the direct costs?(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
- How much did the existing shareholders receive from the sale of their shares before paying their portion of the direct costs?(Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
- If the issue had been sold to the underwriters for $30 a share, how many shares would the company have needed to sell to raise the same amount of cash?(Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
- How much better off would the existing shareholders have been if the issue had been sold to the underwriters for $30 a share?(Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
- Match Group went public in November 2015. The company sold 33,333,333 shares at $12 per share. The underwriting spread was $0.66 a share, and the direct expenses were $0.21 a share.
- What was the percentage underwriting spread?(Enter your percentage answer with 1 decimal place.)
- How much did the company raise after all expenses?(Enter your answer in dollars not millions. Round your answer to the nearest dollar.)
- On its first day of trading the stock closed at $14.74. Calculate the dollar cost of underpricing.(Enter your answer in dollars not millions. Round your answer to the nearest dollar.)
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