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1. A company wants to raise $20 million in equity at an expected offering price of $30 per share. Its investment banker will receive $2.50 for each share sold and incur expenses of $2.5 million. The company will incur expenses of $1 million. How many shares must be sold for the company to receive $20 million. Round to the nearest whole number.

A. .666,667

B. 727,273

C. 763,636

D. 854,545

E. None of the above

2. A company is planning an IPO of 10 million shares. Each share is expected to sell at $15 per share. The underwriters will charge a 6% spread and incur expenses of $1.5 million. All shares sell at the expected price. Price per share at the end of the first day is $16.50. The current price is $20. How much money was left on the table?

A. $13.5 million

B. $15 million

C. $35 million

D. $50 million

E. None of the above

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92641502

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