Moonscape has just completed an initial public offering. The firm sold 3 million

Question

Moonscape has just completed an initial public offering. The firm sold 3 million shares at an offer price of $10 per share. The underwriting spread was $.70 a share. The price of the stock closed at $16 per share at the end of the first day of trading. The firm incurred $400,000 in legal, administrative, and other costs. What were flotation costs as a fraction of funds raised? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Moonscape has just completed an initial public offering. The firm sold 3 million shares at an offer price of $10 per share. The underwriting spread was $.70 a share. The price of the stock closed at $16 per share at the end of the first day of trading. The firm incurred $400,000 in legal, administrative, and other costs. What were flotation costs as a fraction of funds raised? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Explanation / Answer

sold 3 millions shares at offer price of $10 per share

underwriting spread $.70 a share

price of the stock closed at $16 per share at the end of the first day of trading

firm incurred $4,00,000 in legel

flotation costs=?

profit for price at the end of the first day of stock is 0.06%

The flotation costs of fraction funds raise=0.66%

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