IPO: White Pharma issues an IPO sold on a best-efforts basis. The company's investment bank demands a spread of 16 per cent of the selling price. The offer price is set at $32 per share. Three million shares are issued. However, the bank was able to see the shares at $26.25 per share. What are the proceeds for the issuer?

Question

Quizplus · Accepted Answer

The proceeds for the issuer are calculated by subtracting the spread from the selling price and then multiplying by the number of shares sold. The spread is 16% of $26.25, which is $4.20. Therefore, the proceeds per share are $26.25 - $4.20 = $22.05. The total proceeds are $22.05 * 3,000,000 = $66.15 million.

IPO: White Pharma Issues an IPO Sold on a Best-Efforts