Your company is conducting an IPO. It has sold 8 million shares at $55 each to an underwriter, and the underwriter sells the shares at $59 each to investors. At the close of the first day's trading, your company's stock price is $58. In addition to the spread to underwriters, your company incurred a further $1.5 million in other direct IPO costs. Which ONE of the following statements is TRUE?

The company incurs an indirect cost due to IPO underpricing of $8 million.

The percentage spread (relative to IPO proceeds to your company) is 7.5%.

The spread and underpricing of your IPO are broadly in line with those of the average US IPO.

(Tick this option if you think that none of the statements is true.)

The sum of the direct costs of the IPO plus the indirect cost to your company due to IPO underpricing amounts to $25.5 million.