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last 2 questions please he problem requires you to use File CO3 on the computer problem spreadsheet. Diction ablishing estimates that it needs 5500,000 to
last 2 questions please
he problem requires you to use File CO3 on the computer problem spreadsheet. Diction ablishing estimates that it needs 5500,000 to support its expected growth. The underwriting as charged by the imvestment banking firm for which you work are 6.5% for such issue sizes. addition, it is estimated that Diction will incur $4,900 in other expenses relared to the IPO. a. If your analysis indicates that Diction's stock can be sold for $40 per share, how many shares must be issued to net the company the $500,000 it needs? b. Suppose that Diction's investment banker charges 10% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the 5500,000 it needs? c. Suppose that Diction's investment banker charges 8.2% rather than 6.5%. Assaming that all other information given earlier is the same, how many shares must Diction issue in this situation to met the company the $500,000 it needs? d. Suppose everything is the same as originally presented, except Diction will incur $5,835 in other expenses rather than $4,900. In this situation, how many shares must Diction issue to net the company the $500,000 it needs? e. Now suppose that Diction decides it only needs $450,000 to support its growth. In this case, its investment banker charges 7% flotation costs, and Diction will incur only $3,840 in other expense. How many shares must Diction issue to net the company the $450,000 it needs? f. Suppose the scenario presented in part (c) exists, except the price of Diction's stock is $32 per share. How many shares must Diction issue to net the company the $450,000 it needs Step by Step Solution
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