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On January 20, Whalen Inc., sold 10 million shares of stock in an SEO. The market price of Whalen at the time was $42.00 per share. Of the 10 million shares, 5 million were primary shares being sold by the company, and the remaining 5 million shares were being sold by the venture capital investors. Assume the underwriter charges 4.5% of the gross proceeds as n underwriting fee.
a. How much money did Whalen raise?
b. How much money did the venture capitalists receive?
c. If the stock price dropped 3.9% on the announcement of the SEO and the new shares were sold at that price, how much money would Whalen receive?
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A firm has to make two payments of $3 million 3 years and 4 years from now respectively. The current 2-Year rate=7% and the 4-Year Rate = 7.5%. If only 2-Year Zeros and another bond with Duration = 8 years are available, how would you immunize this l..
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