FIN BUS401 P13-2 (Flotation cost and issue size) Your firm needs to raise $10million

FIN BUS401 P13-2 (Flotation cost and issue size) Your firm needs to raise $10million. Assuming that flotation costs are

FLOTATION COSTS AND ISSUE SIZE

PROBLEM 13-2 FLOTATION COSTS AND ISSUE SIZE

PROBLEM 13-2

Complete problem 13-2 on page 433                                             SOLUTION

PROBLEM 13-2 (Flotation cost and issue size) Your firm needs to raise $10million. Assuming that flotation costs are expected to be $15 per share, and that the market price of the stock is $120, how many shares would have to be issued? what is the dollar size of the issue?                  SOLUTION