Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Initial public offering On April 18, 2019, the video conferencing company, Zoom completed its IPO on the Nasdaq. Zoom sold 911,434 shares of Class A

Initial public offering On April 18, 2019, the video conferencing company, Zoom completed its IPO on the Nasdaq. Zoom sold 911,434 shares of Class A stock with 1 vote per share at an offer price of $36 and underwriter discount of $1.75 per share. Zoom's closing stock price on the first day of trading on the secondary market was $62.57, 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 Zoom's IPO.

b. Calculate the percentage underwriter discount.

c. Calculate the dollar amount of the underwriting fee for Zoom's IPO.

d. Calculate the net proceeds for Zoom's IPO.

e. Calculate Zoom's IPO underpricing assuming that market value per share is the same for both classes of stock.

f. Calculate Zoom's market capitalization.

g. What percentage of Zoom's total common stock (Class A plus Class B) do Class A stockholders own after the IPO? What percentage of votes do they control?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions