Howett Pockett, Inc., plans to issue 11.6 million new shares of its stock. In di

Question

Howett Pockett, Inc., plans to issue 11.6 million new shares of its stock. In discussions with its investment bank, Howett Pocket learns that the bankers recommend a net proceed of $37.00 per share and they will charge an underwriter’s spread of 4.5 percent of the gross proceeds. In addition, Howett Pockett must pay $5.0 million in legal and other administrative expenses for the seasoned stock offering. Calculate the gross proceeds per share. (Round your answer to 2 decimal places.)

Gross proceeds $ 38.74per share

Calculate the total funds received by Howett Pockett from the sale of the 11.6 million shares of stock.(Enter your answer in millions of dollars rounded to 3 decimal places.)

Funds received by Howett Pockett $ __________m

Explanation / Answer

Total funds received = 11.6 * 37 per share - 5 = 424.2million

Gross proceeds = Underwriter's spread + Net proceeds

Gross proceeds = 0.045*gross proceeds + 37

Gross proceeds = 38.74 per share.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.