Question

ABC Company used an investment bank to do IPO. In IPO, the company sold 32,494 shares...

ABC Company used an investment bank to do IPO. In IPO, the company sold 32,494 shares at $65 each. The investment bank charged 6% spread. At the end of the 1st day of trading, ABC's stock price closed at $103.

What is the indirect cost of the IPO to the company?

Do not enter $ in the answer box.

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Answer #1

Calculation of indirect cost of the IPO to the company:

= {No. of shares (Price closed - Selling price)} * Rate Bank charged

= {32494 (103-65)} * 6%

= 74086.32

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