1) Bruce Wayne is going public with his new business. Berkman Investment Bank will be his...

1) Bruce Wayne is going public with his new business. Berkman Investment Bank will be his banker and is doing a best efforts sale with a 3.9% commission fee. The SEC has authorized Wayne 4,840,000 shares for this issue. He plans to keep 1,210,000 shares for himself, hold back an additional 200,000 shares according to the green-shoe provision for Berkman Investment Bank, pay off Venture Capitalists with 500,000 shares, and sell the remaining shares at $16.17 a share. Given the bids at the auction (shown on the table here:

Bidder	Quantity Bid
Gotham Pension Fund	1,990,000
Clark Kent Investors	1,020,000
Central City Insurance	610,000
Arthur Curry	350,000
Barry Allen	340,000
Total	4,310,000

a) How many shares does Gotham Pension get?

b) How many shares does Clark Kent Get?

c)How many shares does Arthur Curry get?

d) How many shares does Barry Allen get?

e) What is the total cash flow to Wayne after the sale?

f) What is the total cash flow to Berkman Investment Bank after the sale?

2) Criss-Cross Manufacturers will issue commercial paper for a short-term cash inflow. Criss-Cross must raise $5,800,000, and the paper will have a maturity of 182 days. If this paper has a maturity value of $50,000 and is selling at an annual interest rate of 8.6%,

what are the proceeds from each paper?

what is the discount rate on the commercial paper?

Expert Solution

jeff jeffy answered 1 year ago

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