Question:
The Conely Corporation is about to go public. It currently has after tax earnings of $7,500,000, and 2,500,000 shares are owned by the present stockholders (the Conely family). The new public issue will represent 600,000 new shares. The new shares will be priced to the public at $20 per share, with a 5 percent spread on the offering price. There will also be $200,000 in out-of-pocket costs to the corporation. Compute the net proceeds to the Conely Corporation.