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

Answer:

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

Explanation:

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

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

$\to 10,000,000 \times 24.45= \ 244,500,000$

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

In the IPO this would raise  

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