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The Elkmont Corporation needs to raise $51.3 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $29 per share and the company’s underwriters charge a spread of 8.5 percent. The SEC filing fee and associated administrative expenses of the offering are $1,453,000
Required:
What are the required proceeds from the sale necessary for the company to pay the underwriter's spread and administrative costs? (Enter the whole number for your answer, not millions (e.g., 1,234,567). Round your answer to the nearest whole number (e.g., 1,234,567).)
The transaction motive for holding cash refers to the need to have cash for which one of the following purposes?
Barton Industries can issue perpetual preferred stock at a price of $52 per share. The stock would pay a constant annual dividend of $4.40 per share. If the firm's marginal tax rate is 40%, what is the company's cost of preferred stock?
Quantitative Problem: Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. What is the firm's weighted average cost of ..
Waldrop Corporation must install $200 of new equipment in its Ohio plant. It can obtain a bank loan for 100% of the required amount at 9% interest on the loan. Alternatively, the firm can leas the equipment on a 2-year lease, the payment would be $11..
Fluid Dynamics Company owns a pump that it is contemplating replacing. The old pump has annual operating and maintenance costs of $8,000/year: it can be kept for 4 years more and will have a zero salvage value at that time. The old pump can be traded..
top gun records and several movie studios have decided to sign a revenue-sharing contract for dvds. each dvd costs the
Mark Sexton and Todd Story, the owners of S&S Air, Inc., were impressed by the work Chris had done on financial planning. What are the monthly payments for a 30-year traditional mortgage? What are the payments for a 20-year traditional mortgage? Prep..
Suppose that you are the manager and sole owner of a highly leveraged company. All the debt will mature in one year. If at that time the value of the company is greater than the face value of the debt, you will pay off the debt. What can you do to in..
Fred and Ethel are both considering buying a corporate bond with a coupon rate of 8%, a face value of $1,000, and a maturity date of January 1, 2025. Which of the following statements is MOST correct? Fred and Ethl will only buy the bonds if the bond..
In September, Ricardo Castíllo got a promotion and a raise. Because his monthly expenses did not increase very much, Ricardo was able to save more dollars. He saved $1,070, which was 40% of his new salary. How much was Ricardo's new salary?
Calculate the DuPont Model, given the following information: cash = $16,080; accounts receivable = $9,500; prepaid = $3,150; supplies = $675; equipment = $25,200; accumulated depreciation - equipment = $8,150 for year one. Cash = $20,000; accounts re..
PBJ Corporation issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5% with interest paid semi annually. The face value of the bonds is 1,000$ and the bonds mature on January 1, 2021. What is the yield to maturity for an PBJ Corporation..
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