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Nelson Paints recently went public by offering 50,000 shares of common stock to the public. The underwriters provided their services in a best efforts underwriting. The offering price was set at $17.50 a share and the gross spread was $2.30. After completing their sales efforts, the underwriters determined that they sold a total of 47,500 shares. How much cash did the company receive from its IPO?

Respuesta :

TomShelby

Answer:

cash received $722,000

Explanation:

amount received per share:

17.5 per share

- 2.3 gross spread

15.2 per share

47,500 shares x $15.2 per share= 722,000 total proceeds

Gross spread: will be the fee of the inderwriters forthe IPO it decrease the amount collected from the issuing company.

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