Question
Pricing Stock Issues in an IPO Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public.
Pricing Stock Issues in an IPO
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $62 million. Zang currently has 5 million shares outstanding and will issue 1.5 million new shares. ESM charges a 5% spread.
What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.
$ ___
How much cash will Zang raise net of the spread? Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Do not round intermediate calculations. Round your answer to three decimal places.
$ __million
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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
College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
4th edition
978-1259995057, 1259995054, 978-0077503987, 77503988, 978-0077639730
