Question: The Berenek Company, whose stock price is now $25, needs to raise $20 million in common stock. Underwritters have informed the firms management that they must price the new issue to the public at $22 per share because of signaling effects. The underwritters compensation will be 5% of the issue price so Beranek will net $20.90 per share. The firm will also incur expenses in the amount of $150,000.
How many shares must the firm sell to net $20 million after underwriting and flotation expenses?