Question: Sunshine Media has just completed an IPO, where 50 million shares of the 125 million shares outstanding were issued to the public at an offering

Sunshine Media has just completed an IPO, where 50 million shares of the 125 million shares outstanding were issued to the public at an offering price of $22 per share. On the offering date, the stock price zoomed to $40 per share. Who gains from this increase in the price? Who loses, and how much?

Step by Step Solution

★★★★★

3.34 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The loss to the existing shareholders is 5018 900m ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

439-B-C-F-C-B (1585).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

An online medical advice company just completed an IPO with an investment bank on a firm-commitment basis. The firm issued 5 million shares of common stock, and the underwriting fees were $4.20 per...

Kauli Company produces cellular phones. It has just completed an order for 10,000 phones placed by Stay connect, Ltd. Kauli recently shifted to an activity based costing system, and its controller is...

1. Explain the difference between a competitive and negotiated cash sale. Which method of sale is likely to yield the lowest funding cost for firms selling plain vanilla bonds in stable markets? 2....

1.) Matthews Manufacturing is negotiating a 1-year credit line with its bank, Worldwide Bank. The amount of the credit line is $5.5 million with an interest rate set at 1.5% above the prime rate. A...

1.) LaJolla Securities Inc. specializes in the underwriting of small companies. The terms of a recent offering were as follows: Number of shares 2 million Offering price $25 per share Net proceeds...

6. On August 19, 2004, Google completed its I.P.O. of 19.6 million shares to the initial investors at $85.00 per share. The closing price of the stock that same day was $100.34. What was the dollar...

uestion 4 (15% On March 13, 1986, Microsoft issued over 3 million shares and raised $61 million during its Initial Public Offering, with an issue price of $21 per share. It closed most recently at...

Hi there I 'm missing 2 questions for my group project, I have attached the whole project on an Excel file but I only need help with this 2 answers. The answer is suppose to be in the pdf I attached...

Case 17 Zynga, Inc. (2011): Whose Turn Is It? Zachary Burkhalter, Daniel Zuller, Concetta Bagnato, Joyce Vincelette, and Ellie A. Fogarty Introduction As Mark Pincus waited for his friend to play a...

One kmol of CO2 is heated at a constant pressure of 100 kPa to 3000 K. (a) Calculate the equilibrium composition of CO2 and use the IGE system state TESTcalc to verify your answers. (b) Use the n-IG...

Explain how the use of DNA probes with different fluorescence emission wavelengths can be used in a single FISH experiment to map the locations of two or more genes. This method is called chromosome...

Tiffany Inc. issued a 9 % note payable to first choice bank for $ 1 0 0 , 0 0 0 with 1 0 equal payments of $ 1 5 , 5 8 2 parentheses principle plus interest due at the end of each year. Indicate the...

In Regardless of Your Major: Welcome to the World of Finance on page 36, we discussed how the topic of Principle 1, the time value of money, is relevant to both your personal and your professional...

You are trying to estimate the beta of a private firm that manufactures home appliances. You have managed to obtain betas for publicly traded firms that also manufacture home appliances. The private...

Boise Cascade also had debt outstanding of $1.7 billion and a market value of equity of $1.5 billion; the corporate marginal tax rate was 36%. a. Assuming that the current beta of 0.95 for the stock...

C-1. How many directors could Mr. Clark elect if he obtains all the proxies for the uncommitted votes? (Do not round intermediate calculations. Round down your answer to the nearest whole number.)...

How to calculate the content of green grid? Thank you 21% 16. Your friend owes $5,000 on a credit card that charges a 21% APR and requires a minimum payment of $150. If your friend kept making $150...

ANSWER IS INCORRECT. Please show your work so I know what I did wrong. I will only give a thumbs up if work is shown. Answer can be solved using formula, Excel, or a financial calculator. Thank you!...