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Initial Public Offering. A Brazilian company called Netshoes...

Initial Public Offering. A Brazilian company called Netshoes completed its IPO on April​ 12, 2017​, and listed on the NYSE.​ Later, Netshoes sold 8,250,000 shares of stock to primary market investors at an IPO offer price of $17.31​, with an underwriting discount of 6.3​%. Secondary market​ investors, however, were paying only ​$16.41 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​ Netshhoes' 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.

a. The total proceeds for​ Netshoes' IPO is ​$

nothing


. ​(Round to the nearest​ dollar.)

b. The dollar amount of the underwriting fee for​ Netshoes' IPO is ​$

nothing


. ​(Round to the nearest​ dollar.)

c. The net proceeds for​ Netshoes' IPO is ​$

nothing


. ​(Round to the nearest​ dollar.)

d. ​Netshoes' market capitalization is ​$

nothing


. ​(Round to the nearest​ dollar.)

e. ​Netshoes' IPO underpricing is

nothing


​%. ​(Round to two decimal​ places.)

f. Explain the IPO underpricing for Netshoes.  ​(Select the best answer​ below.)

A.

Negative underpricing indicates secondary market investors are willing to pay more for existing shares than primary market investors were for new shares.

B.

Negative underpricing indicates primary market investors are not willing to pay as much for existing shares as secondary market investors were for new shares.

C.

Negative underpricing indicates secondary market investors are not willing to pay as much for existing shares as primary market investors were for new shares.

D.

Negative underpricing indicates secondary market investors are not willing to pay as much for new shares as primary market investors were for existing shares.

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