Problem:
Barnegat Light sold 210,000 shares in an initial public offering. The underwriter's explicit fees were $72,000. The offering price for the shares was $42, but immediately upon issue, the share price jumped to $52.
Required:
Question: What is the best estimate of the total cost to Barnegat Light of the equity issue?
- $2,028,000
- $2,172,000
- $72,000
- $2,100,000
Note: Please provide equation and explain comprehensively and give step by step solution.