How much cash will the company raise net of the spread

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The current market value of Ginger Corporation's equity is $120 million. The company has 10 million outstanding shares and will issue 5 million new shares. The investment banker charges a 7% spread. 

a. What is the correctly valued offer price?

b. How much cash will the company raise net of the spread?

c What percentage of the company will new stockholders own?

d. What are 3 reasons that explain why a firm wants to raise new equity capital?

e. What are 3 reasons that explain why a firm would want to raise new capital through debt rather than equity?

Reference no: EM131658355

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