Dusty Corporation is issuing an IPO with an issue price of $15 per share that is expected to raise about $100 million. Which of the following is likely to be true?

Question

Quizplus · Accepted Answer

The cost of an IPO includes the underwriting fee, legal fees, and other expenses, which can typically range from 5-7% of the total amount raised. Therefore, in this case, the cost of the IPO to Dusty Corporation is likely to be around $5-$7 million. It is difficult to predict whether the stock price will be less than $15 on the first trading day or whether the stock will perform well in the future, as these factors depend on various market conditions and other factors.

Dusty Corporation Is Issuing an IPO with an Issue Price