The Meadows Corporation needs to raise $62 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $50 per share and the company's underwriters charge a spread of 8 percent. If the SEC filing fee and associated administrative expenses of the offering are $675,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.) Answer is complete but not entirely correct. 1,352,700 X Number of shares offered

The Meadows Corporation needs to raise $62 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $50 per share and the company's underwriters charge a spread of 8 percent. If the SEC filing fee and associated administrative expenses of the offering are $675,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.) Answer is complete but not entirely correct. 1,352,700 X Number of shares offered

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 2P

See similar textbooks

Similar questions

The Meadows Corporation needs to raise $70 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $30 per share and the company’s underwriters charge a spread of 8 percent, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.)
The Sullivan Co. needs to raise $78 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $31 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold? In the previous problem, if the SEC filing fee and associated administrative expenses of the offering are $1,425,000, how many shares need to be sold now?
The Elkmont Corporation needs to raise $51.1 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $27 per share and the company’s underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,451,000. How many shares need to be sold? Note: Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.
The Elkmont Corporation needs to raise $52.2 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $38 per share and the company’s underwriters charge a spread of 7 percent. How many shares need to be sold? Note: Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.
The Boat Works has decided to take the company public by offering a total of 150,000 shares of common stock to the public. The firm has hired an underwriter who arranges a firm commitment underwriting and suggests an initial selling price of $22 a share with a spread of 8 percent. As it turns out, the underwriters only sell 122,400 shares. How much cash will the firm receive from its first public offering?
Carbon8 Corporation wants to raise $120 million in a seasoned equity offering, net of all fees. Carbon8 stock currently sells for $28.00 per share. The underwriters will require a fee of $1.25 per share and indicate that the issue must be underpriced by 7.5%. In addition to the underwriter's fee, the firm will incur $785,000 in legal, administrative, and other costs. How many shares must Carbon8 sell to raise the desired amount of capital?
The Windsor Corporation has 120,000 shares outstanding with a current market price of $8.10 per share. The company needs to raise an additional $36,000 to finance new expenditures and has decided on a rights issue. The issue will allow current stockholders to purchase one additional share for 20 rights at a subscription price of $6 per share. How many new shares must be issued? What will be the ex-rights stock price? If the ex-rights price were set at $7.90, would you as a potential new stockholder choose to buy shares ex-rights or buy shares at the old price and exercise your rights?
The Elkmont Corporation needs to raise $63.8 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $22 per share and the company’s underwriters charge a spread of 7.5 percent, how many shares need to be sold?
The Telwar Company has just gone public. Under a firm commitment agreement, the company received $32.40 for each of the 4.14 million shares sold. The initial offering price was $34.80 per share, and the stock rose to $41.80 per share in the first few minutes of trading. The company paid $909,000 in legal and other direct costs and $258,000 in indirect costs. What was the flotation cost as a percentage of funds raised? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The Beranek Company, whose stock price is now $25, needs to raise$20 million in common stock. Underwriters have informed the firm’s management that they must price the new issue to the public at $22 per sharebecause of signaling effects. The underwriters’ compensation will be 5% ofthe issue price, so Beranek will net $20.90 per share. The firm will also incurexpenses in the amount of $150,000. How many shares must the firm sell tonet $20 million after underwriting and flotation expenses?