A company wants to raise 500 million in a new stock issue, Financial Management

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A company wants to raise 500 million in a new stock issue

A company wants to raise 500 million in a new stock issue. Its investment banker indicates the sale of new stock will require 8% underpicking and a 7% spread. ( hint, the underpricing is 8% of the current stock price, in the spread is 7% of the issue price)

A) Assuming the company's stock price does not change from its current price of $75 per share, how many shares must the company sell and what price to the public?

B) How much money will the investment banking syndicate's earn on the sale?

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Financial Management: A company wants to raise 500 million in a new stock issue

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