Pricing Stock Issues in an IPO Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $55 million. Zang currently has 5 million shares outstanding and will issue 1.5 million new shares. ESM charges a 5% spread. What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.
Pricing Stock Issues in an IPO Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $55 million. Zang currently has 5 million shares outstanding and will issue 1.5 million new shares. ESM charges a 5% spread. What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![E
eBook
Pricing Stock Issues in an IPO
8 Problem Walk-Through
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current
value of equity is $55 million. Zang currently has 5 million shares outstanding and will issue 1.5 million new shares. ESM charges a 5% spread.
What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.
$
How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be
entered as 5,000,000. Round your answer to the nearest dollar.
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7d4978a-587f-4fb0-b662-b1647e006431%2F7c616462-ee4b-45d5-891b-ba3eda53f326%2Fts02pgk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E
eBook
Pricing Stock Issues in an IPO
8 Problem Walk-Through
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current
value of equity is $55 million. Zang currently has 5 million shares outstanding and will issue 1.5 million new shares. ESM charges a 5% spread.
What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.
$
How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be
entered as 5,000,000. Round your answer to the nearest dollar.
$
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