Calculating costs of issuing stock turbo technology

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Reference no: EM131905782

1. Calculating Costs of Issuing Stock Turbo Technology Corp. recently went public with an initial public offering of 3.14 million shares of stock. The underwriter used a firm commitment offering in which the net proceeds was $8.20 per share and the underwriter's spread was 8 percent of the gross proceeds. Turbo also paid legal and other administrative costs of $340,000 for the IPO. Calculate the gross proceeds per share received by Turbo from the sale of the 3.14 million shares of stock.

a) $8.92

b) $9.03

c) $8.20

d) $8.31

2. JEN Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate rate of return on this stock is 9 percent per year, and the stock consistently goes ex-dividend 15 days before dividend payment date, what will be the expected minimum price in light of the dividend payment logistics?

a) $55.36

b) $55.56

c) $50.36

d) $60.34

Reference no: EM131905782

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