Ray is about to go public. Its present stockholders own 530,000 shares. The new public issue will represent 1,000,000 shares. The shares will be priced at $20 to the public with a 10% spread. The out-of-pocket costs in addition to the spread will be $570,000. What are the net proceeds to Ray?

Ray is about to go public. Its present stockholders own 530,000 shares. The new public issue will represent 1,000,000 shares. The shares will be priced at $20 to the public with a 10% spread. The out-of-pocket costs in addition to the spread will be $570,000. What are the net proceeds to Ray?

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 5P

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