Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Fishwick Enterprises has 221,000 shares outstanding, half of which are owned by Jennifer Fishwick and half by her cousin. The two half would be shares
Fishwick Enterprises has 221,000 shares outstanding, half of which are owned by Jennifer Fishwick and half by her cousin. The two half would be shares that are currently held by Jennifer Fishwick. Suppose that the shares are sold at an issue price of $50 but to a. What percentage of the company will Jennifer own after the issue? Note: Round your answer to the nearest whole percentage. b. What will her holding be worth at the end of the first day's trading? proceeds from the IPO? d. Suppose that the shares are sold at an issue price of $50 but rise to $80bytheendofthefirstdaystrading,what Jennifer's wealth (cash plus the value of her remaining holding)? Note: Enter your answer in millions rounded to 1 decimal place. e. What is the cost of underpricing to Jennifer in dollars? Note: Enter your answer in millions rounded to 1 decimal place. Fishwick Enterprises has 221,000 shares outstanding, half of which are owned by Jennifer Fishwick and half by her cousin. The two half would be shares that are currently held by Jennifer Fishwick. Suppose that the shares are sold at an issue price of $50 but to a. What percentage of the company will Jennifer own after the issue? Note: Round your answer to the nearest whole percentage. b. What will her holding be worth at the end of the first day's trading? proceeds from the IPO? d. Suppose that the shares are sold at an issue price of $50 but rise to $80bytheendofthefirstdaystrading,what Jennifer's wealth (cash plus the value of her remaining holding)? Note: Enter your answer in millions rounded to 1 decimal place. e. What is the cost of underpricing to Jennifer in dollars? Note: Enter your answer in millions rounded to 1 decimal place
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