Computation of initial return earned by investors

Assignment Help Finance Basics

Reference no: EM1315496

Computation of initial return earned by investors who are allocated shares in the IPO

Company A is executing an initial public offering with the following characteristics. The company will sell 10 million shares at an offer price of $25 per share, the underwriter will charge a 7 percent underwriting fee, and the shares are expected to sell for $32 per share by the end of the first-day\'s trading. Assuming this IPO is executed as expected answer the following:

a) Calculate the initial return earned by investors who are allocated shares in the IPO.

b) How much will WCMC receive from this offering?

c) What is the total cost (underwriting fee and under-pricing) of this issue to WCMC?

Reference no: EM1315496

Questions Cloud

Examine the statement by game theory : When McDonalds Corp reduced its price of the big mac by 75 percent-Using your knowledge of game theory, what do you think disrupted McDonald's plan?

Creating a multiple bar graph of data : Projection are form the U.S. National Center for Education Statistics>. Create a multiple bar graph of data, and then explain any trends.

Find the product as a sum containing only sines or cosines : Find the product as a sum containing only sines or cosines

Research for a voip solution : In the future, Klamath’s separate the voice network will be dismantled. All the voice, data, and video traffic will traverse Metro Ethernet network.

Computation of initial return earned by investors : Computation of initial return earned by investors who are allocated shares in the IPO and how much will WCMC receive from this offering

Immediate lyric division accused microsoft of forcing : The Immediate lyric Division accused Microsoft of forcing consumers to buy Internet Explorer whenever they bought Windows

Statement of cost of production : Assume you own a home re-modelling company. You are currently earning short-run profits. The home re-modelling industry is an increasing-cost industry.

Computing probability that items will be good : Find out the following probabilities. Probability that exactly 27 items will be good.

Estimating the future sales using adjusted sales forecast : Compute a seasonalized or adjusted sales forecast.

User Account

All Pages