What price per share will the company actually receive

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A large, mature company wants to raise $680 million in a new stock issue. Its lead investment banker indicates the sale of stock will require 5 percent underpricing to attract new investors. They will also charge a 4 percent spread. The company expects they will incur $1,850,000 in legal and adminstrative fees to raise these funds. The company's current stock price is $53 per share.

Problem a) At what price will the shares be sold to the public?

Problem b) What price per share will the company actually receive?

Problem c) How many shares must the company sell to raise the desired funds?

Problem d) How much money will the investment banking syndicate earn on the sale?

Problem e) What is the total cost of raising the funding, including all costs?

Reference no: EM132741639

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