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roceeds for Keros' IPO. amount of the underwriting fee for Keros' IPO. eceeds for Keros' IPO. pitalization for Keros' outstanding stock. pricing for Keros' IPO. erpricing for Keros. or Keros' IPO is $ (Round to the nearest dollar.)

roceeds for Keros' IPO. amount of the underwriting fee for Keros' IPO. eceeds for Keros' IPO. pitalization for Keros' outstanding stock. pricing for Keros' IPO. erpricing for Keros. or Keros' IPO is $ (Round to the nearest dollar.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $15.32, with an underwriting discount of 6.1%. Secondary market investors, however, were paying $21.77 per share for Keros' 19,189,391 shares of stock outstanding. 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 S. (Round to the nearest dollar.) d. Keros' market capitalization is S (Round to the nearest dollar.) e. Keros' IPO underpricing is %. (Round to two decimal places.) f. Explain the IPO underpricing for Keros. (Select the best answer below.)
Transcribed Image Text: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 $15.32, with an underwriting discount of 6.1%. Secondary market investors, however, were paying $21.77 per share for Keros' 19,189,391 shares of stock outstanding. 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 S. (Round to the nearest dollar.) d. Keros' market capitalization is S (Round to the nearest dollar.) e. Keros' IPO underpricing is %. (Round to two decimal places.) f. Explain the IPO underpricing for Keros. (Select the best answer below.)
d. Keros' market capitalization is S (Round to the nearest dollar.) e. Keros' IPO underpricing is %. (Round to two decimal places.) f. Explain the IPO underpricing for Keros. (Select the best answer below.) O A. Negative underpricing indicates secondary market investors are willing to pay more for existing shares than primary market investors were for new shares. O B. Negative underpricing indicates secondary market investors are not willing to pay as much for new shares as primary market investors were for existing shares. OC. Negative underpricing indicates secondary market investors are not willing to pay as much for existing shares as primary market investors were for new shares. O D. Negative underpricing indicates primary market investors are not willing to pay as much for existing shares as secondary market investors were for new shares.
Transcribed Image Text:d. Keros' market capitalization is S (Round to the nearest dollar.) e. Keros' IPO underpricing is %. (Round to two decimal places.) f. Explain the IPO underpricing for Keros. (Select the best answer below.) O A. Negative underpricing indicates secondary market investors are willing to pay more for existing shares than primary market investors were for new shares. O B. Negative underpricing indicates secondary market investors are not willing to pay as much for new shares as primary market investors were for existing shares. OC. Negative underpricing indicates secondary market investors are not willing to pay as much for existing shares as primary market investors were for new shares. O D. Negative underpricing indicates primary market investors are not willing to pay as much for existing shares as secondary market investors were for new shares.
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