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Becker Brothers is the managing underwriter for a 1.95-million-share issue by Martina’s Hamburger Heaven. Becker Brothers is “handling” 8 percent of the issue. Its price is $30 per share, and the price to the public is $31.00.
Becker also provides the
Compute Becker Brothers overall gain or loss from managing the issue.
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- Eagle Security Co. has just gone public. Under a firm commitment agreement, the firm received $36.50 for each of the 7.25 million shares sold. The initial offering price was $38.75 per share, and the stock rose to $42.65 per share in the first few minutes of trading. The firm paid $2,285,000 in direct legal and other costs and $988,000 in indirect costs. What was the underwriters' spread of this offer?A company is going public at $19 and will use the ticker XYZ. The underwriters will charge a 7 percent spread. The company is issuing 18 million shares, and insiders will continue to hold an additional 36 million shares that will not be part of the IPO. The company will also pay $1.5 million of audit fees, $3 million of legal fees, and $300,000 of printing fees. The stock closes the first day at $21. Answer the following questions: a. At the end of the first day, what is the market capitalization of the company? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place. $ million b. What are the total costs of the offering? Include underpricing in this calculation. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place. $…Hello, thank you for the help. The answer is coming back as incorrect.
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- LYFT 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 sharesBhaCullumber, Inc., a high-technology firm in Portland, raised a total of $60 million in an IPO. The company received $27 of the $30 per share offering price. The firm’s legal fees, SEC registration fees, and other out-of-pocket costs were $350,000. The firm’s stock price increased 17 percent on the first day of trading. What was the total cost to the firm of issuing the securities?
