Assume the issuer incurs $2 million in other expenses to sell 4 million shares at $55...

 

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Assume the issuer incurs $2 million in other expenses to sell 4 million shares at $55 each to an underwriter and the underwriter sells the shares at $59 each. By the end of the first day's trading, the issuing company's stock price had risen to $68. What is the cost of underpricing? Assume the issuer incurs $2 million in other expenses to sell 4 million shares at $55 each to an underwriter and the underwriter sells the shares at $59 each. By the end of the first day's trading, the issuing company's stock price had risen to $68. What is the cost of underpricing?

Answer rating: 100% (QA)

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