What is total dollar amount of expenses associated

Assignment Help Financial Management

Reference no: EM131878840

Tiger Brews is a Columbia, MO based brewer of breakfast beer. They went public seven years ago with an issuance of 5 million shares which, as of yesterday, were trading at $50.67 per share. They are looking to raise capital to start-up a chain of brewpubs in St. Louis by issuing an additional 1.5 million shares tomorrow in a Seasoned Equity Offering (SEO).

Management expects the current publicly traded shares to drop 2.5% at tomorrow's offering and remain at that price after the offering. However their investment bank, hoping for a fully subscribed offering, has suggested an offer price of $49.56 for those investors allocated shares from the SEO (i.e. there will likely be underpricing). The investment banker intends to charge a 7% spread for a firm commitment underwriting of the issue and $250,000 in legal and registration fees. The management team also estimates that at least one month's worth of the CFO's available man-hours were dedicated to preparing the offering and the CFO currently earns $120,000 per year.

What is the total dollar amount of expenses (direct and indirect) associated with Tiger Brew's SEO?

Reference no: EM131878840

Questions Cloud

Advantages and disadvantages of cloud computing : What are the information security implications of Cloud Computing, and how can a company mitigate against them?

Load passwords from a stored password file : We will extending the Caesar cypher we looked at earlier into a full-fledged password saver. The program will be able to: Load passwords from stored password

How do employees interact with each other : What does the working environment look like? (furnishings, artwork, lighting, sounds, etc.) How do employees interact with each other?

Calculate the break points of total financing associated : Calculate the break points of total financing associated with each source of capital for Bonanza Brothers.

What is total dollar amount of expenses associated : What is the total dollar amount of expenses (direct and indirect) associated with Tiger Brew's SEO?

What is the most that you would be willing to pay : What is the most that you would be willing to pay for a payment stream of $100 per year for the first fifteen years and $200 per year for the next five years.

What is the present value of the stream of cash flows : Consider an investment that pays $200 one year from now, with cash flows increasing by $200 per year through year 4.

Explain the purpose of an enterprise system : Discussion Questions- Explain the purpose of an enterprise system? Describe and discuss the three types of enterprise systems.

What is current stock price : Michelle’s Manufacturing Inc. currently pays a $2 per share dividend. If the required return on this stock is 13%, what is the current stock price?

User Account

All Pages