The taussing company, whose stock price is currently $30, needs to raise $15 mil

Question

The taussing company, whose stock price is currently $30, needs to raise $15 million by issuing common stock. Underwriters have informed Taussig's management that it must price th enew issue to the public at $27.53 per share to ensure that all shares will be sold. The underwriter's compensation will be 7 percent of the issue price, so Taussig will net $25.60 per share. the company will also incur expenses in the amount of $360,000. how many share must taussig sell to net $15 million after underwrting and flotation expenses?

Explanation / Answer

share must taussig sell to net $15 million after underwrting and flotation expenses = (15000000+360000)/25.6 = 600000

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