Sea Grove Beach Corporation Is Executing an Initial Public Offering

question 87

Multiple Choice

Sea Grove Beach Corporation is executing an initial public offering with the following characteristics. The company will sell 12 million shares at an offer price of $20 per share, the underwriter will charge a 7 percent underwriting fee, and the shares are expected to sell for $27.50 per share by the end of the first day's trading. Assuming this IPO is executed as expected.
-What is the total cost (underwriting fee and underpricing) of this issue to Sea Grove Beach Corporation?

• A) $6.30 million
• B) $16.80 million
• C) $106.80 million
• D) $125.00 million

---

Definitions:

Sexually Transmitted Infections

Infections that are primarily spread through sexual contact, also known as sexually transmitted diseases (STDs).

United States

The United States is a country primarily located in North America, consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

Ages

Various stages or periods in human life characterized by distinct physical, psychological, or developmental features.

Older Adults

Individuals in the later stage of life, often considered to be those aged 65 and older.