Answer:
(A) $143,220,000
(B) $9,452,520
(C) $133,767,480
Explanation:
(a) The computation of the total proceed is shown below:
= Number of shares sold at IPO × IPO price
= 8,250,000 shares × $17.36
= $143,220,000
(b) The computation of the dollar amount of the underwriting fee is shown below:
= Total proceeds × underwriting discount
= $143,220,000 × 6.6%
= $9,452,520
(c) The computation of the net proceeds is shown below:
= Total proceeds - underwriting fee
= $143,220,000 - $9,452,520
= $133,767,480
Answer:
(a) $143,220,000
(b) $9,452,520
(c) $ 133,767,480
Explanation:
IPO- stands for initial public offering. It occurs when a private company wants to sell its shares to the public by listing on an exchange platform
Primary market- initial market where shares of a private company are sold to the public for the first time
Secondary market- this is a market where investors can buy and sell these shares based on perceived information so as to make profits
Underwriter- a third party which in this case, sells the shares on behalf of the private company during an IPO
Underwriting discount- cost of the underwriting service described above
Given the above definitions, the total proceeds for Netshoes' IPO (price * quantity of shares sold during IPO) is $143,220,000. The commission paid (for costs incurred to sell shares) by Netshoes to the underwriters is $9,452,520 and the net proceeds for Netshoes' IPO (total proceeds less commission) is $ 133,767,480.
