Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

When Microsoft went public, the company sold two million new shares (the primary issue). In addition, existing shareholders sold 0.6 million shares (the secondary issue)

image text in transcribed
When Microsoft went public, the company sold two million new shares (the primary issue). In addition, existing shareholders sold 0.6 million shares (the secondary issue) and kept 21.2 million shares. The new shares were offered to the public at \\( \\$ 23 \\) and the underwriters recelved a spread of \\( \\$ 1.43 \\) a share. At the end of the first day's trading, the market price was \\( \\$ 36 \\) a share. a. How much money did the company recelve after paying its portion of the direct costs? (Round your answer to 2 decimal places.) Sual of money the company recelved minion b. How much did the existing shareholders receive from the sale after paying their portion of the direct costs? (Round your answer to 3 decimal places.) sum of noney the existing ahareholders received s. c. If the issue had been sold to the underwriters for \\( \\$ 33 \\) a share, how many shares would the company have needed to sell to raise the some amount of cash? (Round your answer to 3 decimal places.) Number of ahare: sition d. How much better off would the existing shareholders have been? (Round your answer to 3 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Finance And Investments

Authors: William Brueggeman, Jeffrey Fisher

16th Edition

1259919684, 978-1259919688

More Books

Students also viewed these Finance questions

Question

What is a PMO and why have many organizations implemented one?

Answered: 1 week ago

Question

Explain the importance of Physical distribution.

Answered: 1 week ago

Question

Define Marketing research.

Answered: 1 week ago