Blue Coral Breweries (BCB) is planning an IPO. Its underwriters have said the stock will sell at

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Blue Coral Breweries (BCB) is planning an IPO. Its underwriters have said the stock will sell at $20 per share. The direct costs (legal fees, printing, etc.) will be $800,000. The underwriters will charge a 7% spread.

a. How many shares must BCB sell to net $30 million?

b. If the stock price closes the first day at $22, how much cash has BCB left on the table?

c. What are BCB’s total costs (direct, indirect, and underwriting) for the IPO?

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Financial Management Theory And Practice

ISBN: 9781111972219

14th Edition

Authors: Eugene F Brigham

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Question Posted: Mar 16, 2024 01:00 PM

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Blue Coral Breweries (BCB) is planning an IPO. Its underwriters have said the stock will sell at

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a How many shares must BCB sell to net 30 million To calculate this we need to consider the total amount needed to be raised including direct costs an...View the full answer

Financial Management Theory And Practice

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