Why are traditional sources of funding not usually available

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1. On August 19, 2004, Google completed its I.P.O. of 19.6 million shares to the initial investors at $85.00 per share. The closing price of the stock that same day was $100.34. What was the dollar value of the underpricing associated with the Google I.P.O.?

2. Suppose that a biotech firm in Pittsburgh raised $120 million in an I.P.O. The firm received $23 per share, and the stock sold to the public for $25 per share. The firm's legal fees, S.E.C. registration fees, and other out-of-pocket costs were $270,000. The firm's stock price increased 17.5% on the first day. What was the total cost to the firm of issuing the securities?

3. Why are traditional sources of funding not usually available for new or emerging businesses?

4. A firm is making an initial public offering. The investment bankers agree to a firm underwriting commitment for 500,000 shares that would be priced to the public at $36 a share. The underwriter's spread is 7%. What were the proceeds for the issuer and the underwriter?

Reference no: EM131790820

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