Question
Ogi Motors conducted an SEO and sold 10 million shares of stock. At the time, the market price of Ogi's stock was CHF 42.50. Of
Ogi Motors conducted an SEO and sold 10 million shares of stock. At the time, the market price of Ogi's stock was CHF 42.50. Of the 10 million shares sold, 4 million shares were primary shares sold by the company, and the remaining 6 million shares were being sold by the venture capital investors. Assume 4% of the gross proceeds are charged by the underwriter as an underwriting fee which is shared proportionately between the primary and secondary shares.
i. What is the amount of money raised by Ogi Motors?
ii. What is the amount of money the underwriter has earned on this transaction?
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