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Problem 6 - 1 0 FARO Technologies, whose products include portable 3 D measurement equipment, recently had 3 5 million shares outstanding trading at $
Problem FARO Technologies, whose products include portable D measurement equipment, recently had million shares outstanding trading at $ a share. Suppose the company announces its intention to raise $ million by selling new shares. a How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that show losses are of the size of the new issue? Note: Enter your answer in millions without a sign. Expected loss million b What percentage of the value of FARO's existing equity prior to the announcement is this expected loss? Note: Round your answer to decimal place. Percentage of the value c At what price should FARO expect its existing shares to sell immediately after the announcement? Note: Do not round intermediate calculations. Round your answer to decimal places. Expected price
Problem
FARO Technologies, whose products include portable D measurement equipment, recently had million shares outstanding trading
at $ a share. Suppose the company announces its intention to raise $ million by selling new shares.
a How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that
show losses are of the size of the new issue?
Note: Enter your answer in millions without a sign.
Expected loss
million
b What percentage of the value of FARO's existing equity prior to the announcement is this expected loss?
Note: Round your answer to decimal place.
Percentage of the value
c At what price should FARO expect its existing shares to sell immediately after the announcement?
Note: Do not round intermediate calculations. Round your answer to decimal places.
Expected price
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