Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $19.55 per share for 580,000 shares. The company will receive $17.90 per share and will incur $165,000 in registration, accounting, and printing fees. a-1. What is the spread on this issue in percentage terms? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Spread a-2. What are the total expenses of the issue as a percentage of total value (at retail)? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expenditure percentage % Shares % b. If the firm wanted to net $20.42 million from this issue, how many shares must be sold? (Do not round intermediate calculations. Enter your answer rounded to the nearest whole number.)
Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $19.55 per share for 580,000 shares. The company will receive $17.90 per share and will incur $165,000 in registration, accounting, and printing fees. a-1. What is the spread on this issue in percentage terms? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Spread a-2. What are the total expenses of the issue as a percentage of total value (at retail)? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expenditure percentage % Shares % b. If the firm wanted to net $20.42 million from this issue, how many shares must be sold? (Do not round intermediate calculations. Enter your answer rounded to the nearest whole number.)
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 12P
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Transcribed Image Text:Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the
retail price will be $19.55 per share for 580,000 shares. The company will receive $17.90 per share and will incur $165,000 in
registration, accounting, and printing fees.
a-1. What is the spread on this issue in percentage terms? (Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
Spread
a-2. What are the total expenses of the issue as a percentage of total value (at retail)? (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places.)
Expenditure percentage
%
b. If the firm wanted to net $20.42 million from this issue, how many shares must be sold? (Do not round intermediate calculations.
Enter your answer rounded to the nearest whole number.)
Shares
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