Need typed answer.Please give answer within 45 minutes Assume that a stock-issuing firm has a choice between a private placement selling the shares for $47.50 per share or a best efforts offering that willsell all available shares at the prices described in the following probability distribution:Best efforts expected probability distributionProbabilitySelling price30%Lowest quoted priceMid-range priceHighest quoted pricePrivate placement45%O Best efforts sale25%Assuming that the issue is fully subscribed, or sold, which method would generate the most capital for the issuing firm?$44.00$46.00$49.00A relatively new IPO selling method has developed: the unsyndicated stock offering. Under this arrangement,O the issue is sold to institutional investors by an underwriting syndicate.100% of the issue is sold to institutional investors by a single underwriter.O the entire issue is sold to both individual and institutional investors by an underwriting syndicate.O 100% of the issue is sold to individual investors by a single underwriter.

Data given: Price of share through private placement=$47.50 per share Probability Selling Price…

Answered: Assume that a stock-issuing firm has a…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 4EP

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