### Financial Problem: Calculating Required Shares for Equity OfferingMagenta Corporation aims to raise $50.6 million through a seasoned equity offering, net of all fees. Currently, Magenta's stock price is $12 per share. The underwriters stipulate a $0.60 spread per share and require the issue to be underpriced by 5 percent. Additionally, the company will incur $1,600,000 in legal, accounting, and other costs. ---**Problem Statement****Objective:** Determine how many shares Magenta must sell to meet their goal.**Given data:**- Target amount to raise: $50.6 million (net)- Current stock price: $12 per share- Underwriter's spread: $0.60 per share- Underpricing requirement: 5%- Additional costs: $1,600,000**Instructions:** Enter your answer in millions rounded to three decimal places.---**Input Prompt**- **Number of shares** (Input box) `million`

The desired shares to be sold are determined with respect to the net price per share, after…

Answered: Magenta Corporation wants to raise…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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