Business

FinanceQ&A LibraryOn January 20, Whalen Inc., sold 9 millionshares of stock in an SEO. The market price ofWhalen at the time was $41.25 per share. Of the9 million shares sold, 4 million shares wereprimary shares being sold by the company, andthe remaining 5 million shares were being soldby the venture capital investors. Assume theunderwriter charges 5.2% of the gross proceedsas an underwriting fee. How much money didWhalen raise?$156.42 million$182.35 million$122.46 million$174.29 millionQuestion

Asked Oct 26, 2019

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Please show all equations and work as needed. Make the correct answer clear. If possible, please type work so it can be copied. Thank you.

Step 1

As requested, I have typed the calculations for your convenience.

The company sold 4 million of primary shares at a price of $41.25. Therefore, amount raised is:

=Price*Number of shares sold

=(41.25*4)million

=$165million

Step 2

Underwriter has charged 5.2% of the gross proceeds

=5.2%*165million

=$8.58million

Step 3

Actual Amount raised from primary shares:

=(165-8.58)million

=$156.42million

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