Moonscape Initial Public Offering and Floatation Costs
IPO Costs. Moonscape has just completed an initial public offering. The firm sold 3 million shares at an offer price of $8 per share. The underwriting spread was $.50 a share. The price of the stock closed at $12 per share at the end of the first day of trading. The firm incurred $100,000 in legal, administrative, and other costs.
1. Were flotation costs for Moonscape higher or lower than is typical for IPOs of this size (see Figure 14-1)?
Please see attachment