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A firm issues the stock and incurs $1 million in other expenses to sell 5...

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Finance

A firm issues the stock and incurs $1 million in other expenses to sell 5 million shares at $50 each to an underwriter and the underwriter sells the shares at $53 each. By the end of the first days trading, the issuing companys stock price had risen to $70. What is the total cost of underpricing?

1. $93 Million

2. $85 Million

3. $88 Million

4. $90 Million

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