Stump, Inc., a technology firm in Prairie View, Texas, issues a $66 million IPO priced at $17 per share, and the offering price to the public is $22 per share. The firm's legal fees, SEC registration fees, and other administrative costs are $350,000. The firm's stock price increases 15 percent on the first day.
a.) What is the underpricing spread?
b.) What is the underpricing on this issue?
c.) What is the firm's total cost of issuing the securities?
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