14. Bavarian Brewhouse is planning an IPO. Under the terms of the IPO, Bavarian Brewhouse...
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14. Bavarian Brewhouse is planning an IPO. Under the terms of the IPO, Bavarian Brewhouse will issue 8 million shares at an offer price of $25 per share. The underwriter charges an 9% underwriting fee and direct costs associated with underwriting are estimated to be $7 million. The stock is expected to trade at $30 at the end of the first trading day. What are the total costs (underwriting and underpricing) of the Bavarian Brewhouse IPO? a. $25 million b. $40 million $65 million d. $80 million
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