Mint corporation had 8000 shares outstanding before listing and planned to issue 10000 new shares in an IPO. The IPO price has been set at 20 dollars per share, and the underwriting spread is 6%. The IPO was a big success with investors, and the share price increased to 35 dollars by the end of the first day of trading.

Answer the following questions 9(a) to 9(e). Note:For all the calculation questions, you are only allowed to write thenumerical answer you calculated for the question,pleaseDO NOTadd $, %, dollars, million, thousand, percent, space, etc. in your answers.

9(a):By how much is the offer mispriced (either under- or over-priced) per share by the end of the first trading day? Please calculate the dollar amount per share.

Answer:

Question20

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Marked out of 1.00

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9(b):Is the offer underpriced or overpriced?

Underpriced

Overpriced

Question21

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Marked out of 2.00

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9(c):What is the total dollar amount that Mint corporation pays as an underwriting spread?

Answer:

Question22

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Marked out of 2.00

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9(d):What is the net amount that Mint corporation raised during the IPO?

Answer:

Question23

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Marked out of 3.00

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9(e):Two years later, Mint corporation has 20000 shares of stock outstanding at a price of 25 dollars per share. The company would like to raise money and has announced a rights issue. Every existing shareholder will be sent one right per share of stock that he or she owns. The company plans to require 4 rights to purchase one new share at a price of 20 dollars per share. What is the total amount of money to be raised through the rights offering?