Question
Could you please help with question 4 of the assignment posted under the link https://www.coursehero.com/file/13987607/InterCat-Revisited4pdf/ 4. As is the case for many start-ups, InterCat is
Could you please help with question 4 of the assignment posted under the link https://www.coursehero.com/file/13987607/InterCat-Revisited4pdf/
4. As is the case for many start-ups, InterCat is working with a very limited capital base. InterCat has a cash reserve of approximately $200,000 that can be spent on the IPO process. However, as Janet and Gilbert are aware that this is not enough to cover the costs, they negotiated a deal with the investment bank that a bridge loan of $200,000 would be provided to cover IPO-related expenses. However, this loan would only be granted once the SEC has confirmed the registration. Therefore, Janet and Gilbert have to make sure that the $400,000 is enough to cover the expenses of the entire IPO process, but also that the $200,000 cash reserve they have available now does not run out before they receive the extra cash injection. They are worried that this arrangement will not suffice to cover the IPO costs when they target an IPO date of 15 June 2009 (26 weeks) because of the associated crashing costs. However, they do not want to delay the IPO because being beaten by Soft Sales might result in a lower stock price. What is your opinion in this matter? What would you recommend?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started