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(Solved): XYZ Used An Investment Bank To Do IPO. In IPO, XYZ Sold 1 Million Shares At $66.52 Each. The Investm...

XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at $66.52 each. The investment bank charged 7% spread. At the end of the 1st day of trading, XYZ stock price closed at $72.63. Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?

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Solution: Total Cost of IPO is $10,766,400 (which is the sum of Direct & indirect cost of IPO) Working Notes: Total Cost of IPO = IPO Di
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