Equity prior to announcement is expected to gain or loss

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Reference no: EM13890246

FARO Technologies, whose products include protable 3D measurement equipment, recently had 17 million shares outstanding trading at $42 a share. Suppose the company announces its intention to raise $200 million by selling new shares.

a. How large a gain or loss in aggregate dollar terms do market signaling studies suggest existing FARO shareholders will experience on the announcement date?

b. What percentage of the value of FARO's existing equity prior to the announcement is this expected to gain or loss?

c. At what price should FARO expect its existing shares to sell immediately after the announcement?

Reference no: EM13890246

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