Computer-Related ProblemThe problem requires you to use File C03 on the computer problem spreadsheet. DictionPublishing estimates that it needs $500,000 to support its expected growth. The underwritingfees 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 manyshares must Diction issue in this situation to net the company the $500,000a.it needs?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 sharesmust Diction issue in this situation to net the company the $500,000 it needs?d. Suppose everything is the same as originally presented, except Diction willincur $5,835 in other expenses rather than $4,900. In this situation, howmany shares must Diction issue to net the company the $500,000 it needs?Now suppose that Diction decides it only needs $450,000 to support itsgrowth. In this case, its investment banker charges 7% flotation costs, andDiction will incur only $3,840 in other expense. How many shares must Dic-tion issue to net the company the $450,000 it needs?C₁e.f.Suppose the scenario presented in part (e) exists, except the price of Diction'sstock is $32 per share. How many shares must Diction issue to net the com-pany the $450,000 it needs?

As per the honor code of Bartleby we are bound to give the answer of first three sub part, please…

Answered: The problem requires you to use File…

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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