The Zuri Co. needs to raise $65.8 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 $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 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
Amount to be raised = 65800000  
Offer price per share = $58  
Underwriting charges = 8% or 0.08  
Issue costs = 458000 

(a)  
Net proceeds required to cover Underwriting spread and Expenses = (Amount raised + issue cost)/ (1underwriters spread)  
(65800000+458000) / (10.80)  
72019565.22  
So amount required is $72,019,566  
(b) Number of shares offered = Required proceeds/Issue price per share 

72,019,566/58  
1,241,716.7  
So number of shares offered are 1241717 

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