Question $26$

A firm conducting an IPO of common stock sold $1$ million new shares at an offer price of $$10$ per share. After the

offering, the firm had $5$ million shares outstanding, and the price of those shares in the secondary market was $$12.$ The

firm's IPO was underpriced by

$0\%$

$100\%$

$20\%$

$16\mathrm{.}7\%$