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Acushnet Holdings went public in late October of 2016. IPO Price: $17.00 Shares Offered: 19,333,333 Underwriting...

Acushnet Holdings went public in late October of 2016.

IPO Price: $17.00

Shares Offered: 19,333,333

Underwriting Spread: 5.75%

Common stock to be outstanding after this offering: 74,093,598

•How much cash did the company receive during the IPO?

•What MVE is implied by the IPO price?

How much did the underwriters make during the IPO?

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Answer #1

We have been given underwritting spread. Basically this can be called as gross profit margin for an underwriter ( Investment Bank)

Total cash received by offering the shares = Shares offered * IPO Price

= 19,333,333 * $17 = $328666661

Underwriter gets 5.75% of Total cash received and remaining amount will go to the company.

Underwriter gets $18898333 and Cash received by the compnay = 309768328

Market Value of equity ( MVE ) by IPO Price = IPO Price * no. of share outstanding

$17 * 74,093,598 = $1259591166

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