Question
XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at...
XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at $61.7 each. The investment bank charged 7% spread. At the end of the 1st day of trading, XYZ stock price closed at $76.08. Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?
Homework Answers
Answer #1
No. of share issued = 1,000,000
Issue price per share = $61.70
Underwriting spread % = 7%
Underwriting cost per share (direct cost) = $4.319
Stock close price on 1st trade day = $76.08
Underpricing cost per share (indirect) = 76.08 - 61.70 = $14.38
Total sum of direct and indirect cost:
Not the answer you're looking for?
Similar Questions
XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at...
XYZ used an investment bank to do IPO. In IPO, XYZ sold 1
million shares at $69.46 each. The investment bank charged 7%
spread. At the end of the 1st day of trading, XYZ stock price
closed at $71.05. Calculate the total cost of IPO. That is, what is
the sum of direct and indirect cost?
XYZ is a retailer and sells 183,000 units per year. It purchases
from a single supplier. Fixed costs per order are $821 and carrying...
. On Thursday, April 18, 2019 Zoom completed its IPO and began trading on the NASDAQ....
. On Thursday, April 18, 2019 Zoom completed its IPO and began
trading on the NASDAQ. The 9.91 million shares in the IPO were
priced at $36 per share. However, on the first day of trading the
shares closed at $62. Assuming the investment bankers and lawyers
charged 7% and 1% of the proceeds respectively; calculate the
direct costs, indirect costs, and firm proceeds.
Lingadalli Corporation (LC) is considering an IPO. LC has 12 million shares of common stock owned...
Lingadalli Corporation (LC) is considering an IPO. LC has 12
million shares of common stock owned by its founder and early
investors. LC has no preferred stock, debt,or short-term
investments. Based on its free cash flow projection, LC ’ s
intrinsic value of operations is $210 million. LC wants to raise
$30 million (net of flotation costs) in net proceeds. The
investment bank charges a 7% underwriting spread. All other costs
associated with the IPO are small enough to be...
An investment bank (IB) agrees to place 5 million new IPO shares for BankMed on...
An investment bank (IB) agrees to place 5 million new IPO
shares for BankMed on a best effort basis, with a retainer
fee of $1 million and a success fee of
$1.25 per share sold
a)
If the IB was able to sell 4,200,000 IPO shares for $54
a share , what are the
total revenues of the IB and how much
does BankMed receives?
b)
Would BankMed be better off with...
On April? 13, 20172017?, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares...
On April? 13,
20172017?,
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? Yext's IPO.
d....
Suppose that in April 2019, Van Dyck Exponents offered 100 shares for sale in an IPO....
Suppose that in April 2019, Van Dyck Exponents offered
100 shares for sale in an IPO. Half of the shares
were sold by the company and the other half by existing
shareholders, each of whom sold exactly half of their existing
holding. The offering price to the public was $50
and the underwriters received a spread of 7%. The
issue was heavily oversubscribed and on the first day of trading
the stock price rose to $160.
What was the cost...
Chen Brothers Inc. sold 66 million shares in its IPO, at a price of $17.00 per...
Chen Brothers Inc. sold 66 million shares in its IPO, at a
price of $17.00 per share. Management negotiated a fee (the
underwriting spread) of 8% on this transaction. What was the
dollar cost of this fee?
Pangeat Inc. planned to offer 3.5 mln shares at $14 in an IPO. A day before...
Pangeat Inc. planned to offer 3.5 mln shares at $14 in an IPO. A
day before the offering their underwriters suggested to change the
offer to 5 mln shares at $28. Pangeat Inc. had an IPO on August
8th, 1998 -- 5 mln shares at $28 were offered (excluding
the 15% overallotment). During the first day of trading, the price
of the stock rose to a maximum of $73 and closed the day at $54.
How much money did Pangeat...
Mayo Corp. has just completed an initial public offering. The firm sold three million shares at...
Mayo Corp. has just completed an initial public offering. The
firm sold three million shares at an offer price of $8 per share.
The underwriting spread was $.50 a share. The price of the stock
closed at $11 per share at the end of the first day of trading. The
firm incurred $100,000 in legal, administrative, and other costs.
What were flotation costs as a fraction of funds raised?
PLEASE SHOW ALL CALCULATIONS
An IPO was offered to the public at $18 a share with the issuing firm receiving...
An IPO was offered to the public at $18 a share with the issuing
firm receiving $16.50 of that amount. The issuer incurred $750,000
in legal and administrative costs. At the end of the first trading
day, the stock was priced at $22.40 a share. What was the total
dollar cost, including both direct and indirect costs, of issuing
the securities if 225,000 shares were offered?
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 41 minutes ago
asked 45 minutes ago
asked 45 minutes ago
asked 53 minutes ago
asked 53 minutes ago
asked 54 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago