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show work Aerospace Z is a private firm that recently went public. The managers of the firm have decided to undertake a Dutch IPO to
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Aerospace Z is a private firm that recently went public. The managers of the firm have decided to undertake a Dutch IPO to sell 1,000,000 shares. The following table summarises all the bids the firm received. (27 marks) Dutch IPO a) What is the IPO price? ( 2 marks) b) What is the number of shares allocated to each investor? (14) c) How much money does Aerospace Z raise from the IPO? (2 marks) d) If the IPO represented 50% of total value of the firm, what is the percentage of Aerospace Z owned by investor A? (3 marks) e) If the stock price rises by 20% the day after the IPO, what is the dollar amount of the profit investor A makes? (3 marks) f) Given the 20% increase in the price of the stock after the IPO day, there are rumors that the underwriters did not do a good job in pricing the stock, hence underpricing the security. How much money is left on the table due to this underpricing? ( 3 marks) Step by Step Solution
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