Answer:
$23,300,000
Explanation:
Total IPO costs include both direct and indirect costs. Direct costs are all the associated costs related to the IPO itself, while indirect costs equal the amount of money lost due to not pricing the stocks correctly.
total stocks issued = $120,000,000 / $50 = 2,400,000
total underwriting fees = ($50 - $47.50) x 2,400,000 = $6,000,000
other associated costs = $500,000
total direct costs = $6,500,000
total indirect costs = ($50 x 14%) x 2,400,000 = $16,800,000
total costs = $23,300,000
