Instruction: - The solution to each question should include detailed calculation steps and (or) explain why you choose that answer. No any step means ZERO point.

5. FBN, Inc. has just sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $70,000. The offering price for the shares was $50, but immediately upon issue the share price jumped to $53.

What is the total cost to FBN of the equity issue?

Is the entire cost of the underwriting a source of profit to the underwriters?