Suppose that Mars, a large private company, is planning to do an IPO. The company currently has $40$ million shares outstanding, and with the help of its lead underwriter, Morgan Stanley, Mars has decided to issue $5$ million shares priced at $$32$ each. In addition, the company has agreed to an underwriting fee of $7\%.$

Assuming that there is no over$-$allotment provision, how much capital will be raised from investors during the IPO $($in millions$)?$

Suppose that Mars, a large private company, is planning to do an IPO. The company currently has $40$ million shares outstanding, and with the help of its lead underwriter, Morgan Stanley, Mars has decided to issue $5$ million shares priced at $$32$ each. In addition, the company has agreed to an underwriting fee of $7\%.$

If the company$$s stock price rises to $$35$ after the IPO, how much value is lost by Mars$$ existing shareholders because of underpricing $($in million$)?$

Suppose that Mars, a large private company, is planning to do an IPO. The company currently has $40$ million shares outstanding, and with the help of its lead underwriter, Morgan Stanley, Mars has decided to issue $5$ million shares priced at $$32$ each. In addition, the company has agreed to an underwriting fee of $7\%.$

If the company$$s stock price rises to $$35$ after the IPO, how much value is lost by Mars$$ existing shareholders because of underpricing $($in million$)?$

$21$

$24$

$18$

$15$