The firm you founded currently has 13 million shares, of which you own 3 million. You...
The firm you founded currently has 13 million shares, of which you own 3 million. You are considering an IPO where you would sell 3 million shares for $ 17 each. If all of the shares sold are primary shares, how much will the firm raise? What will be your percentage ownership of the firm after the IPO?
Homework Answers
Number of share issue = 3,000,000
Issue Price = $17.
Total Value firm raise = 3,000,000 × $17
= $51,000,000
Total Value firm raise is $51,000,000.
Number of share before IPO = 13,000,000
Number of shares after IPO = 13,000,000 + 3,000,000
= 16,000,000
Number of share you holds = 3,000,000
Your Ownership percentage = 3,000,000 / 16,000,000
= 18.75%
Your Ownership percentage after IPO is 18.75%.
kindly provide feedback.
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