Reference no: EM13477297

Taylor Corporation wants to raise $40 million. Its stock price is now $25 per share. The new issue will be priced at $23 per share. The company will incur expenses of $1 million. The underwriters'' compensation will be 8% of the issue price and the underwriter will incur expenses of $1.2 million. <br/> <br/>a. How many shares of stock must be sold for the company to net $40 million after costs and expenses? <br/> <br/>b. The out-of-pocket expenses incurred by the investment banker were $300,000. What profit or loss would the investment banker realize? <br/> <br/>c. Explain the terms "best efforts basis" and "underwriting" as they are used in investment banking. . <br/> <br/> <br/> <br/> <br/> <br/> <br/> <br/> <br/>d. What is the most important single reason for a firm to go public. <br/> <br/> <br/> <br/> <br/> <br/> <br/>e. What is the most important single reason for a firm NOT to go public. <br/> <br/> <br/> <br/>