A company is planning a new plant and needs to raise (net of underwriting cost) $15.52 million to finance it. The compan
Posted: Sun Jun 05, 2022 11:10 am
A company is planning a new plant and needs to raise (net of
underwriting cost) $15.52 million to finance it. The company plans
to raise the money through a general cash offering priced at an
offer price of $4 a share. The underwriters charge a 3 per cent
spread. How many shares does the company have to sell to achieve
its goal (in millions to three decimal places)? (Hint: required
amount/(1-spread) = issue amount)
underwriting cost) $15.52 million to finance it. The company plans
to raise the money through a general cash offering priced at an
offer price of $4 a share. The underwriters charge a 3 per cent
spread. How many shares does the company have to sell to achieve
its goal (in millions to three decimal places)? (Hint: required
amount/(1-spread) = issue amount)