Question
Sea Grove Beach Corporation is executing an IPO with the following characteristics. The company will sell 12 million shares at an offer price of $20
Sea Grove Beach Corporation is executing an IPO with the following characteristics. The company will sell 12 million shares at an offer price of $20 per share and the investment bank underwriting the offer will charge a 7 percent underwriting spread. If the first day return is 50%, what is the total cost (underwriter fee and underpricing) in $ from the firms point of view?
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Advanced Financial Accounting
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
6th edition
013703038X, 978-0137030385
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