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A mid-sized firm plans to issue 10 million shares during an IPO. The underwriter plans to sell shares at $18.60; however, many investors believe the company should be valued at $27.50 per share. If the underwriter charges a $1.7 million fee to undertake the IPO, how much will the firm raise in the IPO?

Respuesta :

Answer:

$184,300,000

Explanation:

A mid-sized firm plans to issue 10 million shares during an IPO.

The underwriter plans to sell shares at $18.60; which implies a cash inflow of 10,000,000 x 18.6 = $186,000,000

If the underwriter charges a $1.7 million fee to undertake the IPO, The firm would raise in the IPO

$186,000,000 - $1,700,000 = 184,300,000

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