During the discussion of the potential IPO and East Coast Yachts’ future, Dan states that he feels the company should raise $60 million. However, Larissa points out that if the company needs more cash soon, a secondary offering close to the IPO would be potentially problematic. Instead, she suggests that the company should raise $90 million in the IPO. How can we calculate the optimal size of the IPO? What are the advantages and disadvantages of increasing the size of the IPO to $90 million?
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