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A week ago
Parafoil Avionics sells 50 million shares of stock in an SEO—40 million being primary shares issued by the company and 10 million being secondary shares sold by investors in the company. At the time of the sale, Parafoil's stock was selling at $12.50 per share.  If the underwriter charges 5% of the gross proceeds as a fee, how much money did existing investors in the company net from the sale?

▸ $500 million

▸ $125 million

▸ $118.75 million

▸ $475 million
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
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$118.75 million
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