What is the total cash flow to Wayne after the sale? To Berkman Investment Bank?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 1C
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Question 10

Issuing securities. Bruce Wayne is going public with his new business. Berkman Investment Bank will be his banker and is doing a best efforts sale with a 4.2%
commission fee. The SEC has authorized Wayne 5,240,000 shares for this issue. He plans to keep 1,110,000 shares for himself, hold back an additional 160,000
shares according to the green-shoe provision for Berkman Investment Bank, pay off Venture Capitalists with 550,000 shares, and sell the remaining shares at $16.78 a
share. Given the bids at the auction (shown on the table here: E), distribute the shares to all bidders using a pro-rata share procedure, and assume Berkman
Investment Bank takes its green-shoe shares. What is the total cash flow to Wayne after the sale? To Berkman Investment Bank?
i
Data Table
Click on the following Icon A in order to paste this table's content into a
spreadsheet
Bidder
Quantity Bid
Gotham Pension Fund
2,130,000
Clark Kent Investors
1,150,000
Central City Insurance
670,000
Arthur Curry
Barry Allen
380,000
290,000
Total
4,620,000
Transcribed Image Text:Issuing securities. Bruce Wayne is going public with his new business. Berkman Investment Bank will be his banker and is doing a best efforts sale with a 4.2% commission fee. The SEC has authorized Wayne 5,240,000 shares for this issue. He plans to keep 1,110,000 shares for himself, hold back an additional 160,000 shares according to the green-shoe provision for Berkman Investment Bank, pay off Venture Capitalists with 550,000 shares, and sell the remaining shares at $16.78 a share. Given the bids at the auction (shown on the table here: E), distribute the shares to all bidders using a pro-rata share procedure, and assume Berkman Investment Bank takes its green-shoe shares. What is the total cash flow to Wayne after the sale? To Berkman Investment Bank? i Data Table Click on the following Icon A in order to paste this table's content into a spreadsheet Bidder Quantity Bid Gotham Pension Fund 2,130,000 Clark Kent Investors 1,150,000 Central City Insurance 670,000 Arthur Curry Barry Allen 380,000 290,000 Total 4,620,000
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