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The Company A needs to raise 100 million dollars of new equity capital. The investment bankers require an underwriting spread of 7% of the offering
The Company A needs to raise 100 million dollars of new equity capital. The investment bankers require an underwriting spread of 7% of the offering price, and the company`s legal, accounting expenses associated with the unseasoned offering are estimated to be $800,000. If the offering price is set at $25 per share, how many shares must be sold to net the firm $100 million? if the shares close the first day`s trading at $29.50 per share, what is the total percentage cost of this issue?
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