In: Finance
Howett Pockett, Inc., plans to issue 10.1 million new shares of its stock. In discussions with its investment bank, Howett Pocket learns that the bankers recommend a net proceed of $34.00 per share and they will charge an underwriter’s spread of 6.0 percent of the gross proceeds. In addition, Howett Pockett must pay $3.5 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 | $ per share |
Calculate the total funds received by Howett Pockett from the sale of the 10.1 million shares of stock.(Enter your answer in millions of dollars rounded to 3 decimal places.) |
Funds received by Howett Pockett |
$ m |
No of shares | 10,100,000 | |
Net proceed | 34 | |
Underwriter commission | 6% | |
Net proceeds | 10100000*34 | |
Net proceeds | 343,400,000 | |
Underwriter commission | 6% | |
Gross proceeds | 343400000/94% | |
Gross proceeds | 365,319,148.9 | |
Gross proceeds per share | 365319148/10100000 | |
Gross proceeds per share | 36.17 | |
Net proceed | 343,400,000 | |
Legal expense | 3,500,000 | |
Funds received by HP | 339,900,000 | |