In its first round of venture funding, SlickBrud received $2…

In its first round of venture funding, SlickBrud received $2 million from a single venture capital firm, DreamVorks, to which it allocated 20 million shares. In a subsequent round, SlickBrud raised $8 million by releasing another 20 million shares to a new venture capital firm. As a result, the equity share of DreamVorks dropped to 20%. Which of the following statements is correct? (Pick one).

PanicKingDoom Gamers (PKDM) expects to net $120 million in i…

PanicKingDoom Gamers (PKDM) expects to net $120 million in its forthcoming IPO, the direct costs of which are estimated to be $1 million. If its underwriters sell the PKDM stock at $25 and charge a 7% spread, what is the total underwriting cost for PKDM?   Note: The firm has to cover the direct costs separately (think of costs associated with meeting with investors, covering marketing and prospectus materials, legal costs for filing with SEC, etc.), as most of these activities occur prior to the actual IPO.