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Category > Accounting Posted 04 May 2017 My Price 5.00

Franklin Oil issued 150,000 shares of stock last week.

 

Franklin Oil issued 150,000 shares of stock last week. The underwriters charged a 7.5 percent spread in the exchange for agreeing to a firm commitment. The legal and accounting fees amounted to 310,000 and the company incurred $65,000 in indirect costs. The offer price was $31 a share. Within the fist hour o trading, the stock price increased to $34 a share. What was the flaotation cost as a percentage of the funds raised?
 
 

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Status NEW Posted 04 May 2017 11:05 AM My Price 5.00

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file 1493899076-Answer.docx preview (133 words )
F-----------ran-----------kli-----------n O-----------il -----------iss-----------ued----------- 15-----------0,0-----------00 -----------sha-----------res----------- of----------- st-----------ock----------- la-----------st -----------wee-----------k. -----------The----------- un-----------der-----------wri-----------ter-----------s c-----------har-----------ged----------- a -----------7.5----------- pe-----------rce-----------nt -----------spr-----------ead----------- in----------- th-----------e e-----------xch-----------ang-----------e f-----------or -----------agr-----------eei-----------ng -----------to -----------a f-----------irm----------- co-----------mmi-----------tme-----------nt.----------- Th-----------e l-----------ega-----------l a-----------nd -----------acc-----------oun-----------tin-----------g f-----------ees----------- am-----------oun-----------ted----------- to----------- 31-----------0,0-----------00 -----------and----------- th-----------e c-----------omp-----------any----------- in-----------cur-----------red----------- $6-----------5,0-----------00 -----------in -----------ind-----------ire-----------ct -----------cos-----------ts.----------- Th-----------e o-----------ffe-----------r p-----------ric-----------e w-----------as -----------$31----------- a -----------sha-----------re.----------- Wi-----------thi-----------n t-----------he -----------fis-----------t h-----------our----------- o -----------tra-----------din-----------g, -----------the----------- st-----------ock----------- pr-----------ice----------- in-----------cre-----------ase-----------d t-----------o $-----------34 -----------a s-----------har-----------e. -----------Wha-----------t w-----------as -----------the----------- fl-----------aot-----------ati-----------on -----------cos-----------t a-----------s a----------- pe-----------rce-----------nta-----------ge -----------of -----------the----------- fu-----------nds----------- ra-----------ise-----------d? -----------
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