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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.

On January 20, Whalen Inc., sold 9 million
shares of stock in an SEO. The market price of
Whalen at the time was $41.25 per share. Of the
9 million shares sold, 4 million shares were
primary shares being sold by the company, and
the remaining 5 million shares were being sold
by the venture capital investors. Assume the
underwriter charges 5.2% of the gross proceeds
as an underwriting fee. How much money did
Whalen raise?
$156.42 million
$182.35 million
$122.46 million
$174.29 million
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On January 20, Whalen Inc., sold 9 million shares of stock in an SEO. The market price of Whalen at the time was $41.25 per share. Of the 9 million shares sold, 4 million shares were primary shares being sold by the company, and the remaining 5 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.2% of the gross proceeds as an underwriting fee. How much money did Whalen raise? $156.42 million $182.35 million $122.46 million $174.29 million

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Expert Answer

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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