Underwriting and Flotation Expenses

The Beranek Company, whose stock price is now $30, needs to raise $25 million in common stock. Underwriters have informed the firm's management that they must price the new issue to the public at $27 per share because of signaling effects. The underwriters' compensation will be 5% of the issue price, so Beranek will net $25.65 per share. The firm will also incur expenses in the amount of $160,000. How many shares must the firm sell to net $25 million after underwriting and flotation expenses? Do not round intermediate calculations. Round your answer to the nearest whole number.

shares

Pricing Stock Issues

Benjamin Garcia's start-up business is succeeding, but he needs $209,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $836,000 and the angel has agreed to invest the $209,000 that is needed. Benjamin presently owns all 41,000 shares in his business. Because the stock will be sold directly to an investor, there is no spread; the other flotation costs are insignificant.

What is a fair price per share? Do not round intermediate calculations. Round your answer to the nearest cent.

$

How many additional shares must Benjamin sell to the angel? Do not round intermediate calculations. Round your answer to the nearest whole number.

shares