IPO: Dienz Pharma issues an IPO sold on a best-efforts basis. The company's investment bank demands a spread of 16 percent 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 taking the selling price per share ($26.25) and subtracting the spread (16% of $26.25), then multiplying by the number of shares (3 million). The calculation is: $26.25 - ($26.25 * 0.16) = $22.05 per share. $22.05 * 3,000,000 = $66.15 million.

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