Hi
the case in this question related to the Firm Commitment type of underwriting which means the underwriter agreed to buy the entire issue at a certain price (17 $ per share) regardless of the stock market price.
so, Stump Inc. would have benefited from this increase simply by choosing the second type of underwriting which is the Best Efforts type.
I hope this is enough answer
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Mohamed Elroby
Accountant
Riyadh
Saudi Arabia
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Original Message:
Sent: 12-01-2019 12:42 PM
From: Ying Zhang
Subject: IPO Cost
Does anyone know when the exam will be?
Original Message------
Stump Inc. a technology firm in Prairie View, Texas, issues a $66 million IPO priced at $17 per share, and the offering price to the public is $22 per share. The firm's legal fees, SEC registration fees, and other administrative costs are $350,000. The firm's stock price increases 15% on the first day. What is the firm's total cost of issuing the securities? | $9.9 million |
| $15 million |
| $25.25 million |
| $350,000 |
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Syed Yousuf Jamal
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