
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question

Transcribed Image Text:Question list
Question 1
O Question 2
Question 3
Question 4
Question 5
K
Initial Public Offering. A biotechnology company, Keros Therapeutics, completed its IPO on April 8, 2020, and listed on the Nasdaq. Keros sold 6,000,000 shares of stock to primary market investors at an IPO offer price of $16.04, with an
underwriting discount of 6.7%. Secondary market investors, however, were paying $20.26 per share for Keros' 19,189,391 shares of stock outstanding (which includes the newly-issued shares).
a. Calculate the total proceeds for Keros' IPO.
b. Calculate the dollar amount of the underwriting fee for Keros' IPO.
c. Calculate the net proceeds for Keros' IPO.
d. Calculate market capitalization for Keros' outstanding stock.
e. Calculate IPO underpricing for Keros' IPO.
f. Explain the IPO underpricing for Keros.
a. The total proceeds for Keros' IPO is $
(Round to the nearest dollar.)
b. The dollar amount of the underwriting fee for Keros' IPO is $. (Round to the nearest dollar.)
c. The net proceeds for Keros' IPO is $
(Round to the nearest dollar.)
d. Keros' market capitalization is $
(Round to the nearest dollar.)
e. Keros' IPO underpricing is%. (Round to two decimal places.)
f. Explain the IPO underpricing for Keros.
"Positive underpricing indicates that secondary-market investors were willing to pay more for the company's shares than the IPO offer price that the shares were sold for in the primary market."
This statement is
(Select the best answer from the drop-down menu.)
SAVE
AI-Generated Solution
info
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
to generate a solution
Click the button to generate
a solution
a solution
Knowledge Booster
Similar questions
- Ansarrow_forwardRoundtree Software is going public using an auction IPO. The firm has received the following bids: Price ($) Number of Shares 14.60 140,000 14.40 200,000 14.20 560,000 14.00 1,000,000 13.80 1,280,000 13.60 880,000 420,000 13.40 Roundtree had previously believed it would issue 1,900,000 shares, however, if Roundtree decides to issue an extra 488,000 shares (for a total of 2,388,000 shares), how much total money will it raise? Roundtree will raise a total amount of $ million (Round to one decimal place.)arrow_forwardBarnegat Light sold 150,000 shares in an initial public offering. The underwriter's explicit fees were $ 60,000. The offering price for the shares was $30, but immediately upon issue, the share price jumped to $38. What is the best estimate of the total cost to Barnegat Light of the equity issue?arrow_forward
- Zyra Company is conducting an initial public offering of 2,500,000 shares. Zyra Company already had 4,000,000 issued and outstanding shares, The new IPO shares shall be sold at P3 per share. What is the tax on initial public offering?arrow_forwardMarseille Manufacturing (MM) stock is currently trading €42 per share, there are 12 million shares outstanding and I own 10% (1.2 million shares). MM is planning a SEO to raise an additional €100 million (proceeds to the firm). MM expects the stock price to drop 4% upon announcing the SEO. Assuming that 10% of the shares sold in the SEO are secondary shares, how many shares should MM plan to sell in order to receive €100 million? Assuming that I did not buy or sell any shares in the SEO, what percentage of MM will I own after the SEO?arrow_forwardLYFT IPO was issued at $72/share. Before the IPO, Lyft had 240 million class A shares outstanding and wanted to issue additional 30 million class A shares. On top of that, Lyft gave its underwriters options to purchase another 5 million shares at $72 each. When Lyft stock price fell below the IPO price of $72, to support the stock price, up to how many shares the underwriters could buy from the open market without losing money? 5 million shares 30 million shares 35 million shares 240 million shares 275 million sharesarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education