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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equity via a general cash offering to raise the needed funds. The
offer price is $58 per share and the company’s underwriters charge
a spread of 8 percent. The SEC filing fee and associated
administrative expenses of the offering are $458,000.
What are the required proceeds from the sale necessary for the
company to pay the underwriter's...

The Scandrick Corporation needs to raise $91 million to finance
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the offer price is $65 per share and the company’s underwriters
charge a spread of 7 percent, how many shares need to be sold? (Do
not round intermediate calculations and enter your answers in
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Renee’s Boutique, Inc., needs to raise $58.08 million to finance
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of $1,000 per bond and they will charge an underwriter’s spread of
4.5 percent of the gross price.
Calculate the net proceeds to Renee’s from the sale of the debt.
(Enter your answer in millions of dollars
and round to 2 decimal places.)
Net
proceeds to Renee’s
$ m...

Suppose your company needs to raise $36 million and you want to
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(Do not round intermediate calculations. Round your answer
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Three Piggies Enterprises has no debt. Its current total value
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Ignoring taxes, what will the company’s value be if it sells $33
million in debt? (Do not round intermediate calculations
and 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.)
Value of the firm
$
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Three Piggies Enterprises has no debt. Its current total value
is $74.4 million. Assume debt proceeds are used to repurchase
equity.
Ignoring taxes, what will the company’s value be if it sells $34.2
million in debt? (Do not round intermediate calculations
and 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.)
Value of the firm $
Suppose now that the company’s tax rate is 34 percent. What will...

The Whistling Straits Corporation needs to raise $30 million to
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funds. If the offer price is $30 per share and the company's
underwriters charge a 11 percent spread, how many shares need to be
sold?
Multiple Choice
1,168,539
1,000,000
1,078,652
1,123,596
900,901

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Use M&M Proposition I to find the price per share of equity.
(Do not round intermediate calculations and...

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