1. What is an Initial Public Offering (IPO)? How does it differ from a Seasoned Equity offering (SEO)?

2. Say, you are interested in an IPO. How can you invest in an IPO?

3. Explain the advantages and disadvantages of going public.

4. What are the direct costs of an IPO to the company? Obtain your answer both in dollars and percentages. a. The underwriting discounts and commissions per share represent the direct costs per share to the company in dollars.

b. You can calculate the underwriting discounts and commissions in percentages as follows: Underwriting discounts and commissions per share divided by Public offering price.

		Per Share			Total
Initial public offering price		$	4.50			$	11,025,000
Underwriting discount (1)		$	0.36			$	882,000
Proceeds, before expenses, to us (2)		$	4.14			$	10,143,000

Show your calculation for 4(b)