UPENN: LOOSE LEAF CORP.FIN W/CONNECT
17th Edition
ISBN: 9781260361278
Author: Ross
Publisher: McGraw-Hill Publishing Co.
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 20, Problem 7QP
Calculating Flotation Costs The Green Hills Co. has just gone public. Under a firm commitment agreement, Green Hills received 529.96 for each of the 7.5 million shares sold. The initial offering price was $32 per share, and the stock rose to $34.56 per share in the first few minutes of trading. Green Hills paid $1,950,000 in direct legal and other costs and $425,000 in indirect costs. What was the flotation cost as a percentage of funds raised?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Telwar Company has just gone public. Under a firm commitment agreement, the company received $32.40 for each of the 4.14 million shares sold. The initial offering price was $34.80 per share, and the stock rose to $41.80 per share in the first few minutes of trading. The company paid $909,000 in legal and other direct costs and $258,000 in indirect costs. What was the flotation cost as a percentage of funds raised?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The Telwar Company has just gone public. Under a firm commitment agreement, the company received $25.11 for each of the 30
million shares sold. The initial offering price was $27 per share, and the stock rose to $32.49 per share in the first few minutes of
trading. The company paid $1.4 million in legal and other direct costs and $375,000 in indirect costs. What was the flotation cost as a
percentage of funds raised?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Flotation costs
%
4. Find the flotation cost percentage
Chapter 20 Solutions
UPENN: LOOSE LEAF CORP.FIN W/CONNECT
Ch. 20 - Prob. 1CQCh. 20 - Debt versus Equity Flotation Costs Why arc the...Ch. 20 - Prob. 3CQCh. 20 - Prob. 4CQCh. 20 - Prob. 5CQCh. 20 - Prob. 6CQCh. 20 - Prob. 7CQCh. 20 - Prob. 8CQCh. 20 - Prob. 9CQCh. 20 - IPO Pricing The following material represents the...
Ch. 20 - Competitive and Negotiated Offers What are the...Ch. 20 - Seasoned Equity Offers What are the possible...Ch. 20 - Prob. 13CQCh. 20 - Prob. 14CQCh. 20 - Prob. 15CQCh. 20 - Rights Offerings Chanelle, Inc., is proposing a...Ch. 20 - Prob. 2QPCh. 20 - Prob. 3QPCh. 20 - Prob. 4QPCh. 20 - Calculating Flotation Costs The St. Anger...Ch. 20 - Prob. 6QPCh. 20 - Calculating Flotation Costs The Green Hills Co....Ch. 20 - Prob. 8QPCh. 20 - Stock Offerings The Newton Company has 50,000...Ch. 20 - Dilution Teardrop, Inc., wishes to expand its...Ch. 20 - Dilution The all-equity firm Metallica Heavy Metal...Ch. 20 - Prob. 12QPCh. 20 - Prob. 13QPCh. 20 - Prob. 14QPCh. 20 - Prob. 15QPCh. 20 - Prob. 16QPCh. 20 - Prob. 17QPCh. 20 - Prob. 18QPCh. 20 - Prob. 1MCCh. 20 - Prob. 2MCCh. 20 - Prob. 3MCCh. 20 - Prob. 4MC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- The Telwar Company has just gone public. Under a firm commitment agreement, the company received $32.50 for each of the 4.15 million shares sold. The initial offering price was $34.90 per share, and the stock rose to $42.00 per share in the first few minutes of trading. The company paid $910,000 in legal and other direct costs and $260,000 in indirect costs. What was the flotation cost as a percentage of funds raised? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Flotation cost percentage %arrow_forwardNonearrow_forwardThe Telwar Company has just gone public. Under a firm commitment agreement, the company received $15.90 for each of the 25 million shares sold. The initial offering price was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of trading. The company paid $860,000 in direct legal and other costs and $330,000 in indirect costs. What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Flotation cost %arrow_forward
- An IPO was offered to the public at $18 a share with the issuing firm receiving $16.50 of that amount. The issuer incurred $850,000 in legal and administrative costs. At the end of the first trading day, the stock was priced at $22.40 a share. What was the total dollar cost, including both direct and indirect costs, of issuing the securities if 225,000 shares were offered?arrow_forwardEagle Security Co. has just gone public. Under a firm commitment agreement, the firm received $36.50 for each of the 7.25 million shares sold. The initial offering price was $38.75 per share, and the stock rose to $42.65 per share in the first few minutes of trading. The firm paid $2,285,000 in direct legal and other costs and $988,000 in indirect costs. What was the underwriters' spread of this offer?arrow_forwardA firm goes public. The firm receives $36.50 for each of the 7.25 million shares sold. The initial offering price was $38.75 per share, and the stock rose to $42.65 per share is the first few minutes of trading. The firm paid $2,285,000 in direct legal and other costs and $988,000 in indirect cost. What was the total for underpricing of this offer?arrow_forward
- In the IPO, the firm issued 3,000,000 new shares. The initial price was $18.00/share with investment bankers retaining $1.26 as fees. The final first-day closing price was $23.50. 1. What were the total proceeds from this offeringarrow_forwardAnsarrow_forwardA firm goes public. The firm receives $35 for each of the 7.75 million shares sold. The initial offering price was $37 per share, and the stock rose to $38.25 per share is the first few minutes of trading. The firm paid $2,085,000 in direct legal and other costs and $833,000 in indirect cost. What were the underwrites spread of this offer?arrow_forward
- Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $18.40 per share for 670,000 shares. The company will receive $16.75 per share and will incur $225,000 in registration, accounting, and printing fees. 1. What is the spread on this issue in percentage terms? 2. What are the total expenses of the issue as a percentage of the total value (at retail)?arrow_forwardHelp me pleasearrow_forwardHelp me pleasearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Securities Markets and Transactions Pt1; Author: Larry Byerly;https://www.youtube.com/watch?v=v0ClVlaxWFY;License: Standard Youtube License