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What was the net proceeds to zilda company

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Reference no: EM132883137

Assume Zilda Company went public in an IPO by issuing 100 million shares at an offer price of $20 per share. The underwriter's commission was 6%. Zilda paid auditor's fee of $500,000, legal advice fees of $1.2 million, and filing fees of $850,000. The first day closing price was $25. Subsequently, the stock price hovered around $28 per share. The underwriter exercised 15% green shoe option.

Problem a) What was the net proceeds to Zilda Company from the IPO issue including the green shoe option?

Problem b) What was the rate of underpricing?

Reference no: EM132883137

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