Question: Batman Enterprises has just completed an initial public offering. The firm sold 650,000 new shares at an offer price of $16.50 per share. The underwritering

Batman Enterprises has just completed an initial public offering. The firm sold 650,000 new shares at an offer price of $16.50 per share. The underwritering spread was $1.27 a share. The firm incurred $375,000 in legal, administrative, and other costs.

What was the cost to the firm of the underwriting spread?

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