Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please do the last question and show steps Batman Enterprises has just completed an initial public offering. The firm sold 1,700,000 new shares (the primary
Please do the last question and show steps
Batman Enterprises has just completed an initial public offering. The firm sold 1,700,000 new shares (the primary offering). In addition, existing shareholders sold 125,000 shares (the secondary issue). The new shares were offered to the public at $9.00 per share and underwriters received a spread of $0.85 a share. The legal, administrative, and other costs were $325,000 and were split proportionately between the company and the selling stockholders. How much money did the company receive before paying its proportion of the direct costs? 13855000 Correct response: 13,855,000 Click "Verify" to proceed to the next part of the question. Suppose that on the first day of trading, the price of Batman's stock is $10.60 per share. What is the cost to the firm from the underpricing? 2720000 Correct response: 2,720,000 Click "Verify" to proceed to the next part of the question. Given that the company receives $13,855,000 from the issue before paying the direct costs and that the cost from underpricing is $2,720,000, what are the total costs of the issue to the firm? Give your answer rounded to the nearest dollar. Number Click "Verify" to proceed. Section Attempt 1 of 1 VerifyStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started