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Category > Business & Finance Posted 15 May 2017 My Price 8.00

Magenta Corporation wants

Magenta Corporation wants to raise $50 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $10 per share. The underwriters will require a spread of $0.50 per share, and indicate that the issue must be underpriced by 5 percent. In addition to the underwriter's fee, the firm will incur $1 million in legal, accounting, and other costs. How many shares must Magenta sell?

I know that I need to calculate the amount the company will net from the sale per share which I got $9.03. But, when I am figuring out the total number of shares Magenta must sell do I need to add in the $1 million because that is a cost they will need covered? So would it be $60 milliion/$9.03?

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Status NEW Posted 15 May 2017 05:05 PM My Price 8.00

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