Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please show work so i can understand how to do it :) Diction Publishing estimates that it needs $500,000 to support its expected growth. The
please show work so i can understand how to do it :)
Diction Publishing estimates that it needs $500,000 to support its expected growth. The underwriting fees charged by the investment banking firm for which you work are 6.5% for such issue sizes. In addition, it is estimated that Diction will incur 54,900 in other expenses related to the IPO. If your analysis indicates that Diction's stock can be sold for S40 per share, how many shares must a. be issued to me the company the $500,000 it needs? -(500,000 +4,900)/(-0.065) = 504,900/0.935 -540,000 540,000 / 40 S per share -13,500 shares C b Suppose that Diction's investment banker charges 10% rather than 6.5%. Assuming that all other information given earlier is the same, bow many shares must Diction issue in this situation to net the company the $500,000 it needs? -- (500,000 +4,900)/(1-10%) Suppose that Diction's investment banker charges 8.2% rather than 6.5%. Assuming that all other information given carlier is the same, how many shares must Diction issue in this situation to ne the compny the $500,000 it needs? d. Suppose everything is the same as originally presented, except Diction will incur 85,835 in other expenses rather than $4.900. In this situation, how many shares must Diction issue to set the company the $500,000 it needs? , 20 While CFN Now suppose that Diction decides it only needs $450.000 to support its growth. to this case, its investment banker charges 7% flotation costs, and Diction will incur only $3.840 in other cups How many shares must Diction issue to set the company the $450,000 itecedo 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