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Computation of the number of shares to be issued for purchase of the machinery.

The Pasta Maker needs to raise $16 million to update its machinery. Management estimates that it will cost the firm $240,000 for accounting, legal, and other costs related to the issuance of securities for this purpose. The underwriting spread is 8 percent and the issue price is $24 a share. How many shares of stock must The Pasta Maker sell to finance its new machinery?

a) 626,543 shares

b) 676,667 shares

c) 735,507 shares

d) 748,211 shares

e) 794,348 shares

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9161455

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