Question

The Scandrick Corporation needs to raise $52 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $45 per share and the company's underwriters charge a spread of 7 percent. If the SEC filing fee and associated administrative expenses of the offering are $650,000, how many sharess need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.) Number of shares offered

Answer 1

Net proceeds per share = Offer price per share * ( 1 - Underwriter's charge ) = 45 * ( 1 - 7% )	41.85
Number of shares offered = ( Amount to be raised + SEC filing fee and administrative expenses ) / Net proceeds per share = ( 52000000 + 650000 ) / 41.85	1258065