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BBB Ltd issues an IPO. The company's investment bank demands a spread of 6 per cent of the offer price, which is set at...

BBB Ltd issues an IPO. The company's investment bank demands a spread of 6 per cent of the offer price, which is set at $3 per share. 4 million shares are issued. What are the proceeds for the issuer (in millions of dollars to the nearest three decimal places; don’t show $ sign or commas eg 18.404)?

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Answer #1

We see that the proceeds for the issuer=Number of shares*(1-spread %)=4*3*(1-6%)=11.28000 million

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