A firm conducting an IPO of common stock sold 5 million new shares in the offering...

Question

Question

A firm conducting an IPO of common stock sold 5 million new shares in the offering...

A firm conducting an IPO of common stock sold 5 million new shares in the offering at an offer price of $20 per share. After the offering, the firm had 10 million shares outstanding, and the price of those shares in the secondary market was $22. The total proceeds from the firm's IPO were ________.

A) $300 million

B) $50 million

C) $110 million

D) $440 million

E) $100 million

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

TOTAL PROCEEDS FROM IPO = OFFER PRICE X NO OF SHARES OFFERED

TOTAL PROCEEDS FROM IPO = 20 X 5 MILLION = 100 MILLION

PRICE IN SECONDARY MARKET IS NOT TO BE CONSIDERED AS OFFER PRICE IS GIVEN AND THAT IS PAID BY SHAREHOLDERS

Answer : E) $100 MILLION

Add a comment

Answer 2

Similar Homework Help Questions

A firm conducting an IPO of common stock sold 5 million new shares in the offering at an offer price of $20 per share. A...

A firm conducting an IPO of common stock sold 5 million new shares in the offering at an offer price of $20 per share. After the offering, the firm had 10 million shares outstanding, and the price of those shares in the secondary market was $22. The firm's IPO was underpriced by ________. A) 10% B) 90.9% C) 25% D) 15.0% E) 50%
Initial public offering. On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext...

Initial public offering. On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares of stock at an offer price of $11 with an underwriting discount of $0.77 per share. Yext’s closing stock price on the first day of trading on the secondary market was $13.41, and 85,489,470 shares were outstanding. a. Calculate the total proceeds for Yext’s IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for...
Initial public offering On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext...

Initial public offering On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares of stock at an offer price of $11 with an underwriting discount of $0.79 per share. Yext's closing stock price on the first day of trading on the secondary market was $13.44, and 85,489,470 shares were outstanding. a. Calculate the total proceeds for Yext's IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for...

P2-4 Initial public offering A Brazilian company called Netshoes completed its IPO on April 12, 2017,...

P2-4 Initial public offering A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the NYSE. Netshoes sold 8,250,000 shares of stock to primary market investors at an IPO offer price of $18, with an underwriting dis- count of 6.5%. Secondary market share for Netshoes' 31,025,936 shares of stock outstanding a. Calculate the total proceeds for Netshoes' IPO. b. Calculate the dollar amount of the underwriting fee for Netshoes' IPo. c. Calculate the net proceeds...
A company prices its IPO of 120 million shares through an underwritten offering at a price...

A company prices its IPO of 120 million shares through an underwritten offering at a price to the public of $20 per share. 100 million shares are being sold by the company and 20 million shares are being sold by selling shareholders. The underwriting discount is 5%. The underwriters are granted an over-allotment option covering 15% of the shares sold. The shares immediately trade up to $25 per share in the first day of trading. Answer the following questions: The...
Alcorn Metals just sold 1.5 million shares through an IPO offering. The shares were offered at...

Alcorn Metals just sold 1.5 million shares through an IPO offering. The shares were offered at $31.50 a share and all shares were sold. The firm received a total of $50,200,000 for this issue. What was the spread?

Angina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1 million...

Angina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1 million shares. After selling these shares at $22 per share offering price and netting 95% of the sale proceeds, the firm is obligated by an earlier agreement to sell an additional 247,000 shares at 90% of the offering price. In total, how much cash will the firm net from these stock sales?
In a recent IPO, the Sausage Co. offered 1.8 million shares of stock at an offer...

In a recent IPO, the Sausage Co. offered 1.8 million shares of stock at an offer price of $15 a share. The underwriting was conducted on a best efforts basis with a spread of 8.5 percent. The Sausage Co. received a total of $21,079,868 in sale proceeds. How many shares were sold? Group of answer choices 1,508,428 1,349,453 1,535,874 1,505,746 1,498,256
6. The market for common stock Aa Aa Type of offering When a company issues stock...

6. The market for common stock Aa Aa Type of offering When a company issues stock or shares to the public for the first time, it is referred to as ary an initial public offering Initial Public Offering performance When the demand for an initial public offering (IPO) of securities exceeds the number of securities issued, the offering is deemed to be O Oversubscribed O Undersubscribed Indigo Inc. is going public and issuing 15D, ODD shares of common stock. The...

A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the...

A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the NYSE. Later Netshoes sold 8,250,000 shares of stock to priary market investors at an IPO offer price of $17.58 with an underwriting discount of 6.5%.Secondary market investors however were paying only $16.43 per share for Netshoes' 31,025,936 shares of stock outstanding. a. calculate the total proceeds for Netshoes IPO b. calculate the dollar amount of the underwriting fee c. calculate the net proceeds for...

A firm conducting an IPO of common stock sold 5 million new shares in the offering...

Homework Answers

Add Answer to:
A firm conducting an IPO of common stock sold 5 million new shares in the offering...

Post as a guest

Earn Coins