Question

A mid-sized firm plans to issue 10 million shares during an IPO. The underwriter plans to sell shares at $24.45; however, many investors believe the company should be valued at $34.25 per share. If the underwriter charges a $1.1 million fee to undertake the IPO, how much will the firm raise in the IPO

Answer 1

The answer is "
`\$243,400,000`".

Step-by-step explanation:

The medium-sized company proposes to issue 10 million IPO shares.

Its Contractor intends to purchase
`$24.45;` this implies cash flows from

`\to 10,000,000 * 24.45= \$244,500,000`

When the contractor pays an IPO cost of million, the company shall

In the IPO this would raise

`\to \$186,000,000 - \$1,100,000 = \$243,400,000`