Parafoil Avionics Sells 50 Million Shares in an SEO -

Parafoil Avionics sells 50 million shares in an SEO - 40 million being primary shares issued by the company and 10 million being secondary shares sold by investors in the company. At the time of the sale, Parafoil's shares were selling at $12.50 per share. If the underwriter charges 5% of the gross proceeds as a fee, how much money did existing investors in the company net from the sale?

A) $475 million
B) $125 million
C) $118.75 million
D) $500 million