Problem
ACME Corporation went public in 2022. The underwriters acquired a total of 103 million shares for $73.00 per share and sold them to the public at an offering price of $76.00. The ?rm also paid a total of $6.43 million in legal fees and other costs. By the end of the first day's trading ACME Corporation stock prices had risen to $81.50
i. What were the direct costs of the issue?
ii. What were the costs of underpricing?
iii. What were the Flotation Costs as a proportion of the market value of the shares?