On April 13, 2017, Yext Inc. completed its IPO on the NYSE. Yext sold 10,500,000 shares of stock at an offer price of $11 with an underwriting discount of $0.77 per share. Yext’s closing stock price on the first day of trading on the secondary market was $13.41, and 85,489,470 shares were outstanding.
a. Calculate the total proceeds for Yext’s IPO.
b. Calculate the percentage underwriter discount.
c. Calculate the dollar amount of the underwriting fee for Yext’s IPO.
d. Calculate the net proceeds for Yext’s IPO.
e. Calculate Yext’s IPO underpricing.
f. Calculate Yext’s market capitalization.

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2022-02-07T12:42:02+01:00

a. The total proceeds for Yext’s IPO is $115,500,000.

b.The percentage underwriter discount is 7%.

c. The dollar amount of the underwriting fee for Yext’s IPO is $8,085,000.

d. The net proceeds for Yext’s IPO is $107,415,000.

e. The Yext’s IPO underpricing is 21.91%.

f. The Yext’s market capitalization is $1,146,413,792.7.

a. Total proceeds:

Total proceeds=11 ×10500000

Total proceeds=$115,500,000

b. Percentage Underwriter discount:

Percentage Underwriter discount=(0.77/11)×100

Percentage Underwriter discount=7%

c. Dollar amount:

Dollar amount= (.77 × 10500000)

Dollar amount=$8,085,000

d. Net proceeds:

Net proceeds=Total proceeds-Dollar amount

Net proceeds=$115,500,000-$8,085,000

Net proceeds=$107,415,000

e. Yext’s IPO underpricing:

Yext’s IPO underpricing= (13.41 - 11)/11×100

Yext’s IPO underpricing=21.91%

f. Yext’s market capitalization:

Yext’s market capitalization=13.41× 85489470

Yext’s market capitalization=$1,146,413,792.7

Inconclusion the total proceeds for Yext’s IPO is $115,500,000 and the percentage underwriter discount is 7%.

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