Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Question
Chapter 18, Problem 5P
Summary Introduction
To calculate: Offer price per share and amount of cash net of spread to be raised by Industry Z.
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Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang’s current value of equity is $60 million. Zang currently has 4 million shares outstanding and will issue 1 million new shares. ESM charges a 7% spread. What is the correctly valued offer price, rounded to the nearest penny? How much cash will Zang raise net of the spread (use the rounded offer price)?
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $60 million. Zang currently has 5 million shares outstanding and will issue 1 million new shares. ESM charges a 7% spread.
What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.
$
How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.
$
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $55 million. Zang currently has 3 million shares outstanding and will issue 2 million new shares. ESM charges a 5% spread. How much cash will Zang raise net of the spread Write out your answer completely.
Chapter 18 Solutions
Financial Management: Theory & Practice
Ch. 18 - Prob. 1QCh. 18 - Prob. 2QCh. 18 - Prob. 3QCh. 18 - Prob. 4QCh. 18 - Prob. 5QCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Bynum and Crumpton, a small jewelry manufacturer,...Ch. 18 - Prob. 5P
Ch. 18 - Prob. 6SPCh. 18 - Prob. 1MCCh. 18 - Prob. 2MCCh. 18 - Prob. 3MCCh. 18 - Prob. 4MCCh. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Prob. 6MCCh. 18 - Prob. 7MCCh. 18 - Prob. 8MCCh. 18 - Prob. 9MCCh. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Randys, a family-owned restaurant chain operating...Ch. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Prob. 14MCCh. 18 - Prob. 15MCCh. 18 - Randys, a family-owned restaurant chain operating...Ch. 18 - Prob. 17MC
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