A company wants to have an IPO and raise $10 million to finance a new plant. Currently it has 1,000 shares of stock outstanding,
 A company wants to have an IPO and raise $10 million to finance a new plant. Currently it has 1,000 shares of stock outstanding, its last reported earnings figure was $5 million, and its book value is $70 million. Comparable companies sell at a P/E of about 20 and have a Market/Book ratio of about 3 times. The investment bankers want to price the shares at about $15 per share. How should the company proceed?
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To determine how the company should proceed with its IPO we need to consider several factors including the desired funding amount the companys financi... View full answer
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Authors: Eugene F. Brigham, Joel F. Houston
10th edition
978-1337902571, 1337902578, 978-1337911054, 1337911054, 978-0324272055
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