House Mountain Breweries (HMB) is planning an IPO. Its underwriters have said the stock will sell at
Question:
House Mountain Breweries (HMB) is planning an IPO. Its underwriters have said the stock will sell at $20 per share. The direct costs (legal fees, printing, etc.) will be $800,000. The underwriters will charge a 7% spread.
a. How many shares must HMB sell to net $30 million?
b. If the stock price closes the first day at $22, how much cash has HMB left on the table?
c. What are HMB’s total costs (direct, indirect, and underwriting) for the IPO?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a To calculate how many shares House Mountain Breweries HMB must sell to net 30 million we need to consider the direct costs underwriters spread and t...View the full answer
Answered By
Joan Gakii
I'm a meticulous professional writer with over five years writing experience. My skill set includes
- Digital Content,
- Interpersonal Communication,
- Web Content and academic Writing,
- Proofreading,
- Editing,
- Project Management, and
- Public Relations.
7+ Reviews
12+ Question Solved
Related Book For 
Financial Management Theory & Practice
ISBN: 9780324652178
12th Edition
Authors: Eugene BrighamMichael Ehrhardt
Question Posted:
