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%
Homework Answers
Answer: Option A is correct
The firm's IPO was under priced by: (Secondary market price- Offer price)/Offer price
=(22-20)/20=0.1 or 10.00%
Add Answer to:
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...
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
Draiman Guitars is offering 75,000 shares of stock in an IPO by a general cash offer. The offer price is $32 per sh...
Draiman Guitars is offering 75,000 shares of stock in an IPO by a general cash offer. The offer price is $32 per share and the underwriter's spread is 6.5 percent. The administrative costs are $315,000. What are the net proceeds to the company? Multiple Choice Ο 51929000 Ο 52.085.000 Ο 5164.000 Ο Ο 52400000 Ο Ο 52244000
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?
24) The price of a share of common stock in a publicly-traded firm represents A) the...
24) The price of a share of common stock in a publicly-traded firm represents A) the board of directors' assessment of the intrinsic value of the firm B) the market's evaluation of a firm's present and future performance © earnings after tax divided by the number of shares outstanding D) the book value of the firm's assets less the book value of its liabilities 25) A 30-year corporate bond issued in 1985 would now trade in the A) primary capital...
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...
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...
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...
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...
just Excrcise 16: Relation of rights to EPS and the price-carnings ratio Walker Machine Tools has 7 million shares of common stock outstanding. The current market price of Walker common stock is S82 p...
just
Excrcise 16: Relation of rights to EPS and the price-carnings ratio Walker Machine Tools has 7 million shares of common stock outstanding. The current market price of Walker common stock is S82 per share rights-on. The company's net income this year is $25 million. A rights offering has been announced in which 700,000 new shares will be sold at $76.50 per share. The subscription price plus seven rights is needed to buy one of the new shares. a. What...
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
Draiman Guitars is offering 75,000 shares of stock in an IPO by a general cash offer. The offer price is $32 per share and the underwriter's spread is 6.5 percent. The administrative costs are $315,000. What are the net proceeds to the company? Multiple Choice Ο 51929000 Ο 52.085.000 Ο 5164.000 Ο Ο 52400000 Ο Ο 52244000
24) The price of a share of common stock in a publicly-traded firm represents A) the board of directors' assessment of the intrinsic value of the firm B) the market's evaluation of a firm's present and future performance © earnings after tax divided by the number of shares outstanding D) the book value of the firm's assets less the book value of its liabilities 25) A 30-year corporate bond issued in 1985 would now trade in the A) primary capital...
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...
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...
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...
just
Excrcise 16: Relation of rights to EPS and the price-carnings ratio Walker Machine Tools has 7 million shares of common stock outstanding. The current market price of Walker common stock is S82 per share rights-on. The company's net income this year is $25 million. A rights offering has been announced in which 700,000 new shares will be sold at $76.50 per share. The subscription price plus seven rights is needed to buy one of the new shares. a. What...
Most questions answered within 3 hours.
-
How does use of the risk/need/responsivity model impact
effective rehabilitation services?
asked 57 seconds ago -
Your rich uncle has just given you a high school graduation
present of $900,000. The present,...
asked 3 minutes ago -
1=Write a program in C to get 16-bit data from Port-D and send
it to ports...
asked 2 minutes ago -
Calculate Ecell for the following reaction and conditions: 0.50
M Br2 (aq), 0.10 M Pb+2 (aq),...
asked 22 minutes ago -
There can be more than one correct answer.
Hypophysiotropic hormones:
A. released by the hypothalamus
B....
asked 28 minutes ago -
Scott Ruskin is the CEO of Decatur Materials. The company has
been struggling for the last...
asked 26 minutes ago -
If you were conducting a study involving twins regarding
genetics and/or upbringing, which would you use?...
asked 47 minutes ago -
Part 1- Inventory: You own a toy company and
you are producing wooden rocking horses. Assume...
asked 56 minutes ago -
What is aromaticity?
Identify aromatic molecules, especially those containing O, N,
S and B
asked 59 minutes ago -
A rubber solid circular wheel of uniform density spins about it
axis at rate of 60...
asked 1 hour ago -
DNA evidence from an early human skeleton in Britain, shows that
early inhabitants of were blue...
asked 1 hour ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 1 hour ago