The IBBS Co. needs to raise $66.9 million to finance its expansion into new mark

ID: 2768319 • Letter: T

Question

The IBBS Co. needs to raise $66.9 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $69 per share and the company’s underwriters charge an 9.5 percent spread.

Required: If the SEC filing fee and associated administrative expenses of the offering are $469,000, how many shares need to be sold? (Enter the whole number for your answer, not millions (e.g., 1,234,567). Round your answer to the nearest whole number (e.g., 1,234,567).)

Explanation / Answer

Answer

Figures in $

Particulars

Amount

Finance needed for expansion

66900000

company’s underwriters charge

6355500

(66900000*0.095)

SEC filing fee and associated administrative expenses of the offering

469000

Total funds needed (a+b+c)

73724500

The offer price per share

Total number of shares tobe issued (d/e)

1068471