Capital Markets (ECM / DCM)
An IPO sells 10m primary shares at $20, with 40m shares outstanding pre-deal. What are gross proceeds to the company and the post-IPO share count?
Model answer
Gross proceeds to the company = 10m × $20 = $200m (before underwriting fees and expenses; net proceeds are lower by ~the gross spread). Post-IPO shares outstanding = 40m existing + 10m new primary =…
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