MaDonna's Has Just Completed an Initial Public Offering

question 80

Essay

MaDonna's has just completed an initial public offering.The firms sold 6 million shares at an offer price of $16 per share.The underwriting spread was $.50 per share.The price of the stock closed at $22 per share at the end of the first day of trading.The firm incurred $200,000 in legal, administrative, and other costs.What were flotation costs as a fraction of funds raised?

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Definitions:

Gneiss

A metamorphic rock that contains a gneissic foliation defined by a preferred orientation of crystals and generally by alternating lighter and darker colored bands.

Catskill Mountains

A mountain range located in southeastern New York, known for its picturesque landscapes and outdoor recreational activities.

Structural History

The record of geologic events that have shaped a region's earth materials and structures over time.

Metamorphic History

The geological history of a rock that has undergone transformation by heat, pressure, or chemically active fluids.