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Aero Company currently has net income of $3 million and 1. million common shares outstanding which sell for $20 per share. Aero has decided to issue new stock to raise $4,000,000 to expand its operations. Aero's investment banker will sell the new shares for $18 per share with a spread of 7%. There will be a $60,000 registration cost.

a. Calculate the current EPS and PE ratio.

b. How many shares will have to be sold to net the $4,000,000 that Aero needs?

 

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9294032

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