Finance Assignment | Professional Writing
5. The Valhalla Corporation needs to raise $75 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 $19 per share and the company’s underwriters charge a spread of 7%, how many shares need to be sold?
Amount of fund required= (offer price x # of shares) x (1-spread)
$75,000,000= ($19* x) x (1-0.07)
$75,000,000/0.93= $19*x
x= 4,224,482
Therefore, as you can see above, the number of shares that need to be sold is 4,244,482.
6. In the previous problem, if the SEC filing fee and associated administrative expenses of the offering are $900,000, how many shares need to be sold?
PLEASE ANSWER #6 using the information that I solved #5 with !!
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