On April 18, 2019, the video conferencing company, Zoom, completed its IPO on the Nasdaq. Zoom sold 9,911,434 shares of Class A stock with one vote per share at an offer price of $36 and an underwriter discount of $1.80 per share. Zoom’s closing stock price on the first day of trading on the sec-ondary market was $62, and 24,070,086 Class A shares were outstanding. There were also 232,318,285 shares of Class B common stock with 10 votes each out-standing and held privately by Zoom insiders. a. Calculate the total proceeds for Zoom’s IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for Zoom’s IPO. d. Calculate the net proceeds for Zoom’s IPO. e. Calculate Zoom’s IPO underpricing. f. Calculate Zoom’s market capitalization assuming that market value per share is the same for both classes of stock. g. What percentage of Zoom’s total common stock (Class A plus Class B) do Class A stockholders own after the IPO? What percentage of votes do they control?
On April 18, 2019, the video conferencing company, Zoom, completed its IPO on the Nasdaq. Zoom sold 9,911,434 shares of Class A stock with one vote per share at an offer price of $36 and an underwriter discount of $1.80 per share. Zoom’s closing stock price on the first day of trading on the sec-ondary market was $62, and 24,070,086 Class A shares were outstanding. There were also 232,318,285 shares of Class B common stock with 10 votes each out-standing and held privately by Zoom insiders. a. Calculate the total proceeds for Zoom’s IPO. b. Calculate the percentage underwriter discount. c. Calculate the dollar amount of the underwriting fee for Zoom’s IPO. d. Calculate the net proceeds for Zoom’s IPO. e. Calculate Zoom’s IPO underpricing. f. Calculate Zoom’s market capitalization assuming that market value per share is the same for both classes of stock. g. What percentage of Zoom’s total common stock (Class A plus Class B) do Class A stockholders own after the IPO? What percentage of votes do they control?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...
Related questions
Question
100%
On April 18, 2019, the video conferencing company, Zoom, completed its IPO on the Nasdaq. Zoom sold 9,911,434 shares of Class A stock with one vote per share at an offer price of $36 and an underwriter discount of $1.80 per share. Zoom’s closing stock price on the first day of trading on the sec-ondary market was $62, and 24,070,086 Class A shares were outstanding. There were also 232,318,285 shares of Class B common stock with 10 votes each out-standing and held privately by Zoom insiders.
a. Calculate the total proceeds for Zoom’s IPO.
b. Calculate the percentage underwriter discount.
c. Calculate the dollar amount of the underwriting fee for Zoom’s IPO.
d. Calculate the net proceeds for Zoom’s IPO.
e. Calculate Zoom’s IPO underpricing.
f. Calculate Zoom’s market capitalization assuming that market value per share is the same for both classes of stock.
g. What percentage of Zoom’s total common stock (Class A plus Class B) do Class A stockholders own after the IPO? What percentage of votes do they control?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning