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What is the dollar value of the total direct costs

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Question - Young Corporation stock currently sells for $50 per share. There are 1 million shares currently outstanding. The company announces plans to raise $5 million by offering shares to the public at a price of $50 per share.

a. If the underwriting spread is 4%, how many shares will the company need to issue in order to be left with net proceeds (before other administrative costs) of $5 million? What is the number of shares?

b. If the under writing spread is 4% and the other administrative costs are $85,000, what is the dollar value of the total direct costs of the issue? What is the total direct costs?

Reference no: EM133034741

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