Question

The Elkmont Corporation needs to raise $52.2 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 $38 per share and the company’s underwriters charge
a spread of 7 percent. The SEC filing fee and associated
administrative expenses of the offering are $1,462,000.

What are the required proceeds from the sale necessary for the
company to pay the underwriter's spread and administrative costs?
**(Do not round intermediate calculations. Enter your answer
in dollars, not millions of dollars, e.g., 1,234,567. Round your
answer to the nearest whole number, e.g., 32.)**

Required proceeds
$

How many shares need to be sold? **(Do not round intermediate
calculations and enter your answer in shares, not millions of
shares, e.g., 1,234,567. Round your answer to the nearest whole
number, e.g., 32.)**

Number of shares offered

Answer #1

Funds required | 52,200,000 | |

SEC and other admin cost | 1,462,000 | |

Total Funds required after commission | 53,662,000 | |

Total Funds required before commission | 53662000/(1-7%) | |

Total Funds required before commission | 57,701,075 | |

Price per share | 38 | |

Total No of shares to be issued | 57701075/38 | |

Total No of shares to be issued | 1,518,449 | |

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Multiple Choice
1,168,539
1,000,000
1,078,652
1,123,596
900,901

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