PLEASE ANSWER ALL THE QUESTIONS

company is going public at $17 and will use the ticker XYz. The underwriters will charge a 7 percent spread. The company is issuing 16 million shars, and insiders will continue a hold an additponal 32 million shares that will not be part of the IPO. The company will also pay $2.5 million of audt fees, $4 million of legal fees, and $600.000 of printing fees. he steck closes the first day at \$21. Now the compary grants a 15 percent overallotment option to the underwriter. The underwriter issues shares that are backed by the entire werallotment option but has not yet exercised the option. a. Explain what will happen if the price of the stock increases to $23.50. Describe the underwriter profits from the overallotment option in your explanation. Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Do not round intermediate calculations. Round your answer to two decimal places. If the stock price increases to $23,50 in the secondary market, the underwriter extreise its option and the underwriter profit will be 5 milison. b. Explain what will happen if the price of the stock decreases to \$13.50. Describe the underwriter profits from the overallotment opelion in your explanation. Enter your answer in millions. For example, an answer of $1.23 milion should be entered as 1.23, not 1,230,000. Do net round intermediate calculations, Pound your answer to two decimal places: If the stock orice decreases to $13.50 in the secondary market, the underwriter exercise its option and the underwriter profit will be $ milion