Shares of stock should be sold for company

Reference no: EM139376

Q. ABC Corporation wishes to increase $20 million. Its stock price is now= $20 each share. New issue will be priced at= $18 each share. Underwriters' compensation will be 5% of issue price. Firm will also acquire expenses of= $200,000.

a) How many shares of stock should be sold for company to net= $20 million after costs also expenses?

b) Out-of-pocket expenses acquired by investment banker were= $300,000. What profit or loss would investment banker realize?

c) Describe terms "best efforts basis" also "underwriting" as they are utilized in investment banking.

d) Find out the most significant single reason for firm to go public.

e) Find out the most significant single reason for the firm NOT to go public.

Reference no: EM139376

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