Marseille Manufacturing (MM) stock is currently trading €42 per share, there are 12 million shares outstanding and I own 10% (1.2 million shares). MM is planning a SEO to raise an additional €100 million (proceeds to the firm). MM expects the stock price to drop 4% upon announcing the SEO. Assuming that 10% of the shares sold in the SEO are secondary shares, how many shares should MM plan to sell in order to receive €100 million? Assuming that I did not buy or sell any shares in the SEO, what percentage of MM will I own after the SEO?
Marseille Manufacturing (MM) stock is currently trading €42 per share, there are 12 million shares outstanding and I own 10% (1.2 million shares). MM is planning a SEO to raise an additional €100 million (proceeds to the firm). MM expects the stock price to drop 4% upon announcing the SEO. Assuming that 10% of the shares sold in the SEO are secondary shares, how many shares should MM plan to sell in order to receive €100 million? Assuming that I did not buy or sell any shares in the SEO, what percentage of MM will I own after the SEO?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter26: Mergers And Corporate Control
Section: Chapter Questions
Problem 7MC
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- Marseille Manufacturing (MM) stock is currently trading €42 per share, there are 12 million shares outstanding and I own 10% (1.2 million shares). MM is planning a SEO to raise an additional €100 million (proceeds to the firm). MM expects the stock price to drop 4% upon announcing the SEO. Assuming that 10% of the shares sold in the SEO are secondary shares, how many shares should MM plan to sell in order to receive €100 million? Assuming that I did not buy or sell any shares in the SEO, what percentage of MM will I own after the SEO?
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