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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

Respuesta :

Answer:

The answer is "[tex]\$243,400,000[/tex]".

Explanation:

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

Its Contractor intends to purchase [tex]$24.45;[/tex] this implies cash flows from

[tex]\to 10,000,000 \times 24.45= \$244,500,000[/tex]

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

In the IPO this would raise  

[tex]\to \$186,000,000 - \$1,100,000 = \$243,400,000[/tex]