Follow-on Public Offering A Brazilian company called Netshoes completed its IPO
ID: 3073710 • Letter: F
Question
Follow-on 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 o primary market investors in a ollow on offering at a price of $18.88 with an underwriting discount f68% Seconday mar nvestor ve er were paying only $15.69 per share for Netshoes 31,025,936 shares of stock outstanding. a. Calculate the total proceeds for Netshoes' follow-on offering b. Calculate the dollar amount of the underwriting fee for Netshhoes' second offering c. Calculate the net proceeds for Netshoes' second offeringg d. Calculate market capitalization for Netshoes' outstanding stock prior to the follow-on issue. e. Calculate IPO underpricing for Netshoes' follow-on offering. f. Explain the follow-on underpricing for Netshoes. a. The total proceeds for Netshoes' follow-on offering is $ 155760000. (Round to the nearest dollar.) b. The dollar amount of the underwriting fee for Netshoes' second offering is. (Round to the nearest dollar.)Explanation / Answer
a) Total proceeds worth = 18.88 *8,250,000 =$155760000
b) Orignal share price is assumbed to be x
x - 6.8% of x = 18.88
x(1 - 6.8/100) =18.88
x (0.932) = 18.88
x = $20.25
Under writing per share = 20.25 - 15.69 = $ 4.56
Total Dollar amount in underwriting = Underwrtiing per share * total shares = 4.56 *31,025,936 = 141,711,265.6 ~ $141,711,266