Magenta Corporation wants to raise $51.4 million in a seasoned equity offering, net of all fees....
Magenta Corporation wants to raise $51.4 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $12 per share. The underwriters will require a spread of $0.4 per share, and indicate that the issue must be underpriced by 4 percent. In addition to the underwriter’s fee, the firm will incur $2,400,000 in legal, accounting, and other costs. How many shares must Magenta sell? (Enter your answer in millions rounded to 3 decimal places.)
Homework Answers
The price will be set at 4% below the current price, or at 0.96 × $12 = $11.52
The underwriters will take $0.40 per share, leaving $11.12/share for Magenta.
Magenta needs to receive $53.8 million (in order to have $51.4 million net of all fees), and it gets $11.12/share, so it must sell $53.8 million/$11.12 = 4.838 million shares.
Add Answer to:
Magenta Corporation wants to raise $51.4 million in a seasoned
equity offering, net of all fees....
Magenta Corporation wants to raise $51.8 million in a seasoned equity offering, net of all fees. Magenta stock currentl...
Magenta Corporation wants to raise $51.8 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $10 per share. The underwriters will require a spread of $0.5 per share, and indicate that the issue must be underpriced by 4 percent. In addition to the underwriter's fee, the firm will incur $2,800,000 in legal, accounting, and other costs. How many shares must Magenta sell? (Enter your answer in millions rounded to 3 decimal places.) Number of...
The Scandrick Corporation needs to raise $80 million to finance its expansion into new markets. The...
The Scandrick Corporation needs to raise $80 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 $35 per share and the company’s underwriters charge a spread of 5 percent. If the SEC filing fee and associated administrative expenses of the offering are $600,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer...
The Elkmont Corporation needs to raise $51.5 million to finance its expansion into new markets. The...
The Elkmont Corporation needs to raise $51.5 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 $31 per share and the company’s underwriters charge a spread of 9.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,455,000. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in...
The Elkmont Corporation needs to raise $63.8 million to finance its expansion into new markets. The...
The Elkmont Corporation needs to raise $63.8 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 $22 per share and the company's underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,450,000. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in...
The Scandrick Corporation needs to raise $52 million to finance its expansion into new markets. The...
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...
YVR, Inc. just announced a 13-million-share SEO (seasoned equity offering) at $43 per share. If all...
YVR, Inc. just announced a 13-million-share SEO (seasoned equity offering) at $43 per share. If all of the SEO shares are primary shares and its underwriter charges 8% of the gross proceeds, how much new capital will YVR raise? After underwriting fees, YVR will raise $____ million. (Round to two decimal places.)
A company is planning a new plant and needs to raise (net of underwriting cost) $14.25...
A company is planning a new plant and needs to raise (net of underwriting cost) $14.25 million to finance it. The company plans to raise the money through a general cash offering priced at an offer price of $5 a share. The underwriters charge a 5 per cent spread. How many shares does the company have to sell to achieve its goal (in millions to three decimal places)? (Hint: required amount/(1-spread) = issue amount) Select one: a. 3.000 b. 15.789...
Item 5 Item 5 The Elkmont Corporation needs to raise $63.8 million to finance its expansion...
Item 5 Item 5 The Elkmont Corporation needs to raise $63.8 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 $22 per share and the company’s underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,450,000. How many shares need to be sold? (Do not round intermediate calculations and...
The Elkmont Corporation needs to raise $63.8 million to finance its expansion into new markets. The company will sell n...
The Elkmont Corporation needs to raise $63.8 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 $22 per share and the company's underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,450,000. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in...
Problem 15-6 Calculating Flotation Costs [LO3] 8. The Whistling Straits Corporation needs to raise $84 million...
Problem 15-6 Calculating Flotation Costs
[LO3]
8.
The Whistling Straits Corporation needs to raise $84 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 $50 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 $850,000, how many shares need to be sold? (Do...
Magenta Corporation wants to raise $51.8 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $10 per share. The underwriters will require a spread of $0.5 per share, and indicate that the issue must be underpriced by 4 percent. In addition to the underwriter's fee, the firm will incur $2,800,000 in legal, accounting, and other costs. How many shares must Magenta sell? (Enter your answer in millions rounded to 3 decimal places.) Number of...
The Elkmont Corporation needs to raise $63.8 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 $22 per share and the company's underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,450,000. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in...
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...
The Elkmont Corporation needs to raise $63.8 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 $22 per share and the company's underwriters charge a spread of 7.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,450,000. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in...
Problem 15-6 Calculating Flotation Costs
[LO3]
8.
The Whistling Straits Corporation needs to raise $84 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 $50 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 $850,000, how many shares need to be sold? (Do...
Most questions answered within 3 hours.
-
A member of the volleyball team spikes the ball. During this
process, she changes the velocity...
asked 53 seconds ago -
Are adult gamers less likely to use a gaming console (Xbox,
PlayStation, Wii, etc...) than teen...
asked 53 minutes ago -
The University of
Texas recently reported that 43% of college students aged 18-24
would spend their...
asked 1 hour ago -
The length of stay at a specific emergency department in
Phoenix, Arizona, in 2009 had a...
asked 20 minutes ago -
. Please give the mechanism for this type of problem. Step by
Step
The toxin that...
asked 24 minutes ago -
If you have a 1M stock solution and you want to dilute 1 :10
with water,...
asked 26 minutes ago -
In a load instruction, the effective address is obtained by
A) Retriving the address from a...
asked 26 minutes ago -
Use the following information to answer this question.
Windswept, Inc. 2017 Income Statement ($ in millions)...
asked 27 minutes ago -
A mutual fund salesperson has arranged to call on four people
tomorrow. Based on past experience...
asked 1 hour ago -
Let the RV Y has the pdf
f ( y ) = 6 y ( 1...
asked 1 hour ago -
Question 12
Where should a copy of a private key should be placed so it is...
asked 29 minutes ago -
What is the entropy change to the surroundings when 1 mol of ice
melts in someone's...
asked 48 minutes ago