EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 3, Problem 16PROB
Summary Introduction
JF needs $345 million to support growth. To raise the needed funds, the flotation cost is 6.5% of the total issue value and the other cost is worth $576,000. The market price of each share is $55. Calculate the number of outstanding shares.
Equity financing is the process of raising equity capital by issuing shares to investors due to short-term need or long-term goal or for the future growth of the firm.
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Jasmine Flowers (JF) must raise $345 million for its future expansion. To do so, JM expects to issue new common stock. Investment bankers have informed the company that the flotation costs will be 6.5% of the total amount issued and that the company will incur another $576,000 in costs associated with the issue. JF can issue its stock for $55 per share. How many shares JF must sell to net the $345 million it needs?
Jasmine Flowers (JF) must raise $345 million for its future expansion. To do so, JM expects to issue new common stock. Investment bankers have informed the company that the flotation costs will be 6.5% of the total amount issued and that the company will incur another $576,000 in costs associated with the issue. JF can issue its stock for $55 per share. How many shares JF
asmine Flowers (JF) must raise $345 million for its future expansion. To do so, JM expects to issue new common stock. Investment bankers have informed the company that the flotation costs will be 6.5% of the total amount issued and that the company will incur another $576,000 in costs associated with the issue. JF can issue its stock for $55 per share. How many shares JF
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