18. To net $18.6 million, what is the total value of stocks that must be sold? *

$17.298 million

$18.600 million

$20.000 million

$22.569 million

None of the above

Other:

19. What percentage of shares will the new investors require? *

20.56%

21.87%

24.50%

26.98%

None of the above

20. How many shares will the new investors require (approximately)? *

1,298,701 shares

1,119,808 shares

1,369,250 shares

1,485,752 shares

None of the above

21. What is the estimated offer price per share? *

$13.31

$15.85

$15.70

$8.30

None of the above

22. What is the total post-IPO value of equity? *

$80.298 million

$81.369 million

$81.600 million

$82.450 million

None of the above

Given the following case, answer questions 18 to 22 below: Romero, a family business operating in North Carolina, has grown to the point that expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to raise about $18.6 million in new capital. Because Romero currently has a debt ratio of 50% and because family members already have all their personal wealth invested in the company, the family would like to sell common stock to the public to raise the $18.6 million. However, the family wants to retain voting control. The estimated pre-IPO value of equity in the company is about $63 million and there are 4 million of existing shares of stock held by family members. The investment bank will charge a 7% spread