Batman Enterprises has just completed an initial public offering

Accounting Nov 23, 2020

Batman Enterprises has just completed an initial public offering. The firm sold 5,000,000 new shares at an offer price of $15.50 per share. The underwritering spread was $0.98 a share. The firm incurred $50,000 in legal, administrative, and other costs. What was the cost to the firm of the underwriting spread?

Expert Solution

Underwriting spread= $0.98

Shares sold= 5000000

Underwriter spread= 0.98* 500000

= 490000

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