f we issue 10 shares at an offering price of $10, suppose the flotation cost is...
f we issue 10 shares at an offering price of $10, suppose the flotation cost is 7%. How much can we actually receive after paying the flotation cost? Say if you do need to receive $100, with 7% flotation cost, how much do you actually need to issue?
Homework Answers
1)
Receive after flotation cost = Price (1 - flotation cost)
Receive after flotation cost = 10 (1 - 0.07)
Receive after flotation cost = $9.3
2)
Number of shares to be issued = 100 / 9.3
Number of shares to be issued = 11 shares
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