Initial public offering. On April 18, 2019, the video conferencing company, Zoom, completed its IPO on the Nasdaq. Zoom sold 9,911,434 shares of Class A stock with 1 vote per share at an offer price of $36 and with underwrite discount of $1.80 per share. Zooms closing stock price on the first day of trading on the secondary market was $62, and 24,070,086 Class A shares were outstanding. There were also 232,318,285 shares of Class B common stock with 10 votes each outstanding and held privately by Zoom insiders. a. Calculate the total proceeds for Zooms IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for Zooms IPO. d. Calculate the net proceeds for Zooms IPO. e. Calculate Zooms IPO underpricing. f. Calculate Zooms market capitalization assuming that market value is the same for both classess of stock. g. What percentage of Zooms total common stock (Class A plus Class B) do Class A stockholders own af-ter the IPO? What percentage of votes do they control? Solution a. Calculate the total proceeds for Zooms IPO. Offer price per share $36 # of IPO shares issued 9,911,434 Total Proceeds $356,811,624 b. Calculate the percentage underwriter discount. Offer price per share $36 Underwriting discount per share $1.80 Percentage underwriter discount 5.0% c. Calculate the dollar amount of the underwriting fee for Zooms IPO. Underwriting discount per share $1.80 # of IPO shares issued 9,911,434 Dollar amount of underwriter discount $17,840,581 d. Calculate the net proceeds for Zooms IPO. Total proceeds $356,811,624 Dollar amount of underwriter discount $17,840,581 Net proceeds $338,971,043 e. Calculate Yexts IPO underpricing. Market price per share $62.00 Offer price per share $36.00 IPO underpricing 26.0% f. Calculate Zooms market capitalization assuming that market value is the same for both classess of stock. Market price per share $62.00 # of shares of stock outstanding (Class A and B) 256,388,371 Market capitalization $15,896,079,002 g. What percentage of Zooms total common stock (Class A plus Class B) do Class A stockholders own af-ter the IPO? What percentage of votes do they control? Number of Class A shares 24,070,086 Number of Class B shares 232,318,285 The Class A common stockholders own % of all Zoom stock The Class A stockholders control only % of Zoom.

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