Don’s Captain Morgan, Inc. needs to raise $12.70 million to finance plant expansion. In discussions with its investment bank, Don’s learns that the bankers recommend an offer price (or gross proceeds) of $20.60 per share and Don’s will receive $16.75 per share. Calculate the underwriter’s spread per share on the issue. (Round your answer to 2 decimal places.) How many shares of stock will Don’s need to sell in order to receive the $12.70 million it needs? (Round your answer to the nearest whole number.)
Don’s Captain Morgan, Inc. needs to raise $12.70 million to finance plant expansion. In discussions with its investment bank, Don’s learns that the bankers recommend an offer price (or gross proceeds) of $20.60 per share and Don’s will receive $16.75 per share. Calculate the underwriter’s spread per share on the issue. (Round your answer to 2 decimal places.) How many shares of stock will Don’s need to sell in order to receive the $12.70 million it needs? (Round your answer to the nearest whole number.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
Problem 5P
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Don’s Captain Morgan, Inc. needs to raise $12.70 million to finance plant expansion. In discussions with its investment bank, Don’s learns that the bankers recommend an offer price (or gross proceeds) of $20.60 per share and Don’s will receive $16.75 per share.
Calculate the underwriter’s spread per share on the issue. (Round your answer to 2 decimal places.)
How many shares of stock will Don’s need to sell in order to receive the $12.70 million it needs? (Round your answer to the nearest whole number.)
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