(Answered) Question you are the owner of a small and successful firm

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Question: You are the owner of a small and successful firm with an estimated market value of $ 50 million. You are considering going public.

a. What are the considerations you would have in choosing an investment banker?

b. You want to raise $ 20 million in new financing, which you plan to reinvest back in the firm. (The estimated market value of $ 50 million is based upon the assumption that this $20 million is reinvested.) What proportion of the firm would you have to sell in the initial public offering to raise $ 20 million?

c. How would your answer to (b) change if the investment banker plans to under price your offering by 10%?

d. If you wanted your stock to trade in the $20-$25 range, how many shares would you have to create? How many shares would you have to issue?

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