Answered: Bruce Wayne is going public with his…

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 3P: Benjamin Garcia’s start-up business is succeeding, but he needs $200,000 in additional funding to...

See similar textbooks

Related questions

Question

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

3.8%

commission fee. The SEC has authorized Wayne

4,790,000

shares for this issue. He plans to keep

1,180,000

shares for himself, hold back an additional

240,000

shares according to the green-shoe provision for Berkman Investment Bank, pay off Venture Capitalists with

530,000

shares, and sell the remaining shares at

$16.46

a share. Given the bids at the auction

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?

Bidder Quantity Bid

Gotham Pension Fund 1,990,000

Clark Kent Investors 1,250,000

Central City Insurance 610,000

Arthur Curry 440,000

Barry Allen 350,000

Total 4,640,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions