A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the NYSE. Netshoes sold 8,250,000 shares of stock to primary market investors at an IPO offer price of $18, with an underwriting dis-count of 6.5%. Secondary market investors, however, were paying only $16.10 per share for Netshoes’ 31,025,936 shares of stock outstanding.a. Calculate the total proceeds for Netshoes’ IPO.b. Calculate the dollar amount of the underwriting fee for Netshoes’ IPO.c. Calculate the net proceeds for Netshoes’ IPO.d. Calculate market capitalization for Netshoes’ outstanding stock.e. Calculate IPO underpricing for Netshoes’ IPO.f. Explain the IPO underpricing for Netshoes.

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Asked Oct 24, 2019
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 A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the NYSE. Netshoes sold 8,250,000 shares of stock to primary market investors at an IPO offer price of $18, with an underwriting dis-count of 6.5%. Secondary market investors, however, were paying only $16.10 per share for Netshoes’ 31,025,936 shares of stock outstanding.a. Calculate the total proceeds for Netshoes’ IPO.b. Calculate the dollar amount of the underwriting fee for Netshoes’ IPO.c. Calculate the net proceeds for Netshoes’ IPO.d. Calculate market capitalization for Netshoes’ outstanding stock.e. Calculate IPO underpricing for Netshoes’ IPO.f. Explain the IPO underpricing for Netshoes.

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A 8,250,000 Number of shares 1 2 IPO price $18 6.50% 3 Underwriting discount 4 Per share value paid by secondary market investors 5 Number of outstanding shares $16.10 31,025,936 6 7a) 8 Total proceeds for Netshoes's IPO 9 Total proceeds $148,500,000 10 11 b) 12 Amount of underwritting fee S9,652,500 13 14 c) 15 Net proceeds $138,847,500 16 17 d) 18 Market capitalization for Netshoes' outstanding stock $499,517,569.60 19 20 e) 21 IPO underpricing for Netshoes IPO -10.56%

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A 8250000 Number of shares 1 2 IPO price 18 0.065 16.1 | 31025936 3 Underwriting discount 4 Per share value paid by secondary market investors 5 Number of outstanding shares 6 7a) 8 Total proceeds for Netshoes's IPO 9 Total proceeds -B1 *B2 10 11 b) B9 B3 12 Amount of underwritting fee 13 14 c) -B9-B12 15 Net proceeds 16 17 d) -B4*B5 18 Market capitalization for Netshoes' outstanding stock 19 20 e) - (B4-B2)/B2 21 IPO underpricing for Netshoes' IPO

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