In April 2019, Van Dyck Exponents offered 170 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 $64
and the underwriters received a spread of 8%. The issue was heavily
oversubscribed and on the first day of trading the stock price rose
to $159.
a-1. What were the proceeds of the issue to the company?
a-2. What were the proceeds of the issue to the shareholders?
b. How much commission did the underwriters receive?
c. How much money was left on the table?
d. What was the cost of the underpricing to the selling shareholders?
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