A Portuguese company called Albufeira Trading Ltd. listed itself on the Frankfurt Stock Exchange through an IPO on October 14, 2019.

Albufeira issued a total of 12,345,000 shares to primary market investors at an IPO offer price of €16, with an underwriting discount of 7%. Secondary market investors, however, were paying only €14.50 per share for Albufeira’s 32,650,000 outstanding shares on the first day of trading.

a. Calculate the total proceeds for Albufeira’s IPO.

b. Calculate the euro amount of the underwriting fees for Albufeira’s IPO.

c. Calculate the net proceeds for Albufeira’s IPO.

d. Calculate market capitalization for Albufeira’s outstanding stock.

e. Calculate IPO underpricing for Albufeira’s IPO.

f. Explain the IPO underpricing for Albufeira.