Sea Grove Beach Corporation is executing an IPO with the following characteristics. The company will sell 12 million shares at an offer price of $20 per share and the investment bank underwriting the offer will charge a 7 percent underwriting spread. If the first day return is 50%, what is the total cost (underwriter fee and underpricing) in $ from the firms point of view?

Answer rating: 100% (QA)

To calculate the total cost from the firms point of view we need to consider the underwriter fee ... View the full answer