Webjet Ltd. needs $145.25 million of new equity capital for an investment. Its common stock is currently selling for $5 per share. New shares can be sold at this price. The investment bankers require an underwriting spread of 5% of the offering price. The company’s legal, accounting, and printing expenses, associated with the secondary offering, are estimated to be $2 million. How many new shares must the company sell to net $145.25 million
Webjet Ltd. needs $145.25 million of new equity capital for an investment. Its common stock is currently selling for $5 per share. New shares can be sold at this price. The investment bankers require an underwriting spread of 5% of the offering price. The company’s legal, accounting, and printing expenses, associated with the secondary offering, are estimated to be $2 million. How many new shares must the company sell to net $145.25 million
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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Webjet Ltd. needs $145.25 million of new equity capital for an investment. Its common stock is currently selling for $5 per share. New shares can be sold at this price. The investment bankers require an underwriting spread of 5% of the offering price. The company’s legal, accounting, and printing expenses, associated with the secondary offering, are estimated to be $2 million. How many new shares must the company sell to net $145.25 million
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