& https://canvas.snu.edu/courses/5603/assignments/114308 longer work with Internet Explorer. We recommend switching over to Microsoft Edge completely for an uninterrupted experience. Explore Microsoft Edge Chapter 3 discusses the investment banking process, including the procedures for issuing stocks and bonds and the decisions made in raising capital. Use this formatted Excel spreadsheet to answer questions on the scenarios below. (Add information from the scenario into the Input Data section to determine the number of shares required, which is listed in cell E12 in the Key Output section of the spreadsheet. Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in cell B12.) Click Submit Assignment to type in the answer the following scenarios: 1. Express Courier (EC) needs $141 million to support future growth. If it issues common stock to raise the needed funds, EC will have to pay its investment banker flotation costs of 6% of the issue's total value. If EC can issue common stock at a market price of $80 per share, how many shares must be issued so that the company has the $141 million that it needs? There are no other issuing expenses or fees in the offering. 2. Jewel Regal Cars (URC) must raise $240 million to support operations. To do so, JRC plans to issue new bonds. Investment bankers have informed JRC that the flotation costs will be 4% of the total amount issued. If the market value of each bond is $1,000, how many bonds must JRC sell to net the $240 million that it needs? There are no other issuing expenses or fees in the offering. 3. Mom's Motel Corporation (MM) plans to issue bonds to raise $175 million that it needs to support future operations. MM's investment banker will charge flotation costs of 2.5% of the total amount issued to help MM raise the funds. In addition, MM will incur other costs associated with the issue that equal $500,000. The market value of each bond at issue time will be $1,000. How many bonds must GM sell to net $175 million that it needs? 4. Jasmine Flowers (JF) must raise $345 million for its future expansion. To do so, JM expects to issue new common stock. Investment bankers have informed the company that the flotation costs will be 6.5% of the total amount issued and that the company will incur another $576,000 in costs associated with the issue. JF can issue its stock for $55 per share. How many shares JF must sell to net the $345 million it needs? 5. Wilderness World (WW) needs to raise $84 million in debt. To issue the debt. WW must pay its underwriter a fee equal to 3% of the issue. The company estimates that other expenses associated with the issue will total $487,000. If the face value of each bond is $1,000. how many bonds must be issued to net the needed $84 million? 50 points possible (10 points for each question) Grading Rubrice Next Previous to search