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What was the net proceeds to Zilda Company

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Reference no: EM132961995

Question - Assume Zilda Company went public in an IPO by issuing 100 million shares at an offer price of $20 per share. The underwriter's commission was 6%. Zilda paid auditor's fee of $500,000, legal advice fees of $1.2 million, and filing fees of $850,000. The first day closing price was $25. Subsequently, the stock price hovered around $28 per share. The underwriter exercised 15% green shoe option.

a) What was the net proceeds to Zilda Company from the IPO issue including the green shoe option?

b) What was the rate of underpricing?

Reference no: EM132961995

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