Randys, a family-owned restaurant chain operating in Alabama, has grown to the point that expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to raise about $18.3 million in new capital. Because Randys currently has a debt ratio of 50% and because family members already have all their personal wealth invested in the company, the family would like to sell common stock to the public to raise the $18.3 million. However, the family wants to retain voting control. You have been asked to brief family members on the issues involved by answering the following questions.

1. Would the sale be on an underwritten or best efforts basis?
2. What is a roadshow? What is book-building?
3. Describe the typical first-day return of an IPO and the long-term returns to IPO investors.
4. What are the direct and indirect costs of an IPO?