HomeworkLib
Question

You have been instructed to buy 100 shares in each of the following three initial public...

You have been instructed to buy 100 shares in each of the following three initial public offerings.
It has been set a price of € 10 per share for each public offering. The number of shares assigned to you (M which A) and the closing price of the first day is

Share M which A Closing price
A 100 8€
B 80 11€
C 20 15€

What is the total gain or loss on these shares at the close of the first day?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Price of allotment = $10 for each of the three IPO

Gain on Share = Quantity*(ClosingPrice-Allotment Price)

Gain on Share A = 100*(8-10) = -200

Gain on Share B = 80*(11-10) = 80

Gain on Share C = 20*(15-10) = 100

Total Gain = -200+80+100 = -20

So, there is a loss of 20 on the first day

0 0
Add a comment
Know the answer?
Add Answer to:
You have been instructed to buy 100 shares in each of the following three initial public...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. Company A sold 100,000 shares in an initial public offering. The underwriter's explicit fees were...

    1. Company A sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $90,000. The offering price for the shares was $30, but immediately upon issue, the share price jumped to $43. What is the net proceeds this company receives from this offering? 2. If you are pessimistic about stock A and its market price is $100/share. You short sell 1,000 shares. Suppose the stock A price falls to $70/share. You close your position and what is...

  • 1. Company A sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $90,000. The offeri...

    1. Company A sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $90,000. The offering price for the shares was $30, but immediately upon issue, the share price jumped to $43. What is the net proceeds this company receives from this offering? 2. If you are pessimistic about stock A and its market price is $100/share. You short sell 1,000 shares. Suppose the stock A price falls to $70/share. You close your position and what is...

  • Moonscape has just completed an initial public offering. The firm sold three million shares at an...

    Moonscape has just completed an initial public offering. The firm sold three million shares at an offer price of $8 per share. The underwriting spread was $0.5 a share. The price of the stock closed at $11 per share at the end of the first day of trading. The firm incurred $80,000 in legal, administrative, and other costs. What were flotation costs as a fraction of funds raised? (Round your answer to 1 decimal place.)   Flotation costs %

  • Initial public offering. On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext...

    Initial public offering. On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares of stock at an offer price of $11 with an underwriting discount of $0.77 per share. Yext’s closing stock price on the first day of trading on the secondary market was $13.41, and 85,489,470 shares were outstanding. a. Calculate the total proceeds for Yext’s IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for...

  • Moonscape has just completed an initial public offering. The firm sold 4 million shares at an...

    Moonscape has just completed an initial public offering. The firm sold 4 million shares at an offer price of $12 per share. The underwriting spread was $0.40 a share. The price of the stock closed at $18.00 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...

  • Moonscape has just completed an initial public offering. The firm sold 1 million shares at an...

    Moonscape has just completed an initial public offering. The firm sold 1 million shares at an offer price of $10 per share. The underwriting spread was $0.60 a share. The price of the stock closed at $16.00 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? (Do not round intermediate calculations. Enter your answer as a percent rounded...

  • Initial public offering On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext...

    Initial public offering On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares of stock at an offer price of $11 with an underwriting discount of $0.79 per share. Yext's closing stock price on the first day of trading on the secondary market was $13.44, and 85,489,470 shares were outstanding. a. Calculate the total proceeds for Yext's IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for...

  • You have been granted options for 25,000 shares with an exercise price of $10 per share....

    You have been granted options for 25,000 shares with an exercise price of $10 per share. If in the future you are fully vested, and if you cashed out your options for what they are worth on a net basis, what total net value did you receive if the stock price was $30 per share? ___________ All of the following are advantages of raising equity through a private placement rather than through a public offering except: The issuer does not...

  • Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a...

    Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a share. You want to ensure that you do not lose more than $200 a share. Which of the following option strategies would allow you to do this? A. A covered call B. A naked call C. A protective put D. You cannot ensure that you will not have losses with stocks Suppose I buy 100 shares of AMD and want to limit my losses...

  • You sell short 200 shares of Doggie Treats Inc. which are currently selling at $52 per...

    You sell short 200 shares of Doggie Treats Inc. which are currently selling at $52 per share. You post the 50% margin required on the short sale. If your broker requires a 28% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account and the firm does not pay any dividends) You short-sell 217 shares of Alibaba, at $108 per share. If you wish to limit your...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT