Initial Public Offering.

A biotechnology company,

Keros Therapeutics,

completed its IPO on April 8,

2020,

and listed on the Nasdaq.

Keros

sold

6,000,000

shares of stock to primary market investors at an IPO offer price of

$17.19,

with an underwriting discount of

6.8%.

Secondary market investors, however, were paying

$20.34

per share for

Keros'

19,189,391

shares of stock outstanding (which includes the newly-issued

shares).

a. Calculate the total proceeds for

Keros'

IPO.b. Calculate the dollar amount of the underwriting fee for

Keros'

IPO.c. Calculate the net proceeds for

Keros'

IPO.d. Calculate market capitalization for

Keros'

outstanding stock.e. Calculate IPO underpricing for

Keros'

IPO.f. Explain the IPO underpricing for

Keros.

Question content area bottom

Part 1

a. The total proceeds for

Keros'

IPO is

$103140000103140000.

(Round to the nearest dollar.)

Part 2

b. The dollar amount of the underwriting fee for

Keros'

IPO is

$70135207013520.

(Round to the nearest dollar.)

Part 3

c. The net proceeds for

Keros'

IPO is

$9612648096126480.

(Round to the nearest dollar.)

Part 4

d.

Keros'

market capitalization is

$390312212.9390312212.9.

(Round to the nearest dollar.)

Part 5

e.

Keros'

IPO underpricing is

18.3218.32%.

(Round to two decimal places.)

Part 6

f. Explain the IPO underpricing for

Keros.

"Positive underpricing indicates that secondary-market investors were willing to pay more for the company's shares than the IPO offer price that the shares were sold for in the primary market."

This statement is

True

False

. (Select the best answer from the drop-down menu.)