2.2 Sezela Limited, has just sold 100 000 shares in an initial public offering. The underwriter's explicit fees were R60 000. The offering price for the shares was R40, but immediately upon issue, the share price jumped to R44. a) What is the total cost to Sezela Limited of the equity issue? b) Is the entire cost of the underwriting a source of profit to the underwriters?
2.2 Sezela Limited, has just sold 100 000 shares in an initial public offering. The underwriter's explicit fees were R60 000. The offering price for the shares was R40, but immediately upon issue, the share price jumped to R44. a) What is the total cost to Sezela Limited of the equity issue? b) Is the entire cost of the underwriting a source of profit to the underwriters?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:2.2 Sezela Limited, has just sold 100 000 shares in an initial public offering. The underwriter's explicit fees were R60 000. The offering price for the shares was R40, but
immediately upon issue, the share price jumped to R44. a) What is the total cost to Sezela Limited of the equity issue? b) Is the entire cost of the underwriting a source of profit
to the underwriters?
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