Convex Incorporated sells 10 million shares in an SEO - 6 million being primary shares issued by the company and 4 million being secondary shares sold by investors in the company. At the time of the sale, Convex's shares were selling at $8.00 per share. If the underwriter charges 6% of the gross proceeds as a fee, how much money was raised in the sale?

Question

Quizplus · Accepted Answer

The gross proceeds from the sale are $8.00 per share x 10 million shares = $80 million. The underwriter's fee is 6% of the gross proceeds, or $80 million x 0.06 = $4.8 million. The net proceeds from the sale are $80 million - $4.8 million = $75.2 million.

Convex Incorporated Sells 10 Million Shares in an SEO -