The problem requires you to use File C03 on the computer problem spreadsheet. Diction Publishing estimates that it needs $500,000 to support its expected growth. The underwriting fees charged by the investment banking firm for which you work are 6.5% for such issue sizes. In addition, it is estimated that Diction will incur $4,900 in other expenses related to the IPO. If your analysis indicates that Diction's stock can be sold for $40 per share, how many shares must be issued to net the company the $500,000 it needs? b. Suppose that Diction's investment banker charges 10% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the $500,000 it needs? C. Suppose that Diction's investment banker charges 8.2% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares
The problem requires you to use File C03 on the computer problem spreadsheet. Diction Publishing estimates that it needs $500,000 to support its expected growth. The underwriting fees charged by the investment banking firm for which you work are 6.5% for such issue sizes. In addition, it is estimated that Diction will incur $4,900 in other expenses related to the IPO. If your analysis indicates that Diction's stock can be sold for $40 per share, how many shares must be issued to net the company the $500,000 it needs? b. Suppose that Diction's investment banker charges 10% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the $500,000 it needs? C. Suppose that Diction's investment banker charges 8.2% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares
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
Problem 1PS
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