Question

In: Finance

On January​ 20, Metropolitan ​Inc., sold 10 million shares of stock in an SEO. The current...

On January​ 20, Metropolitan ​Inc., sold 10 million shares of stock in an SEO. The current market price of Metropolitan at the time was $ 42.00 per share. Of the 10 million shares​ sold, 6 million shares were primary shares being sold by the​ company, and the remaining 4 million shares were being sold by the venture capital investors. Assume the underwriter charges 5 % of the gross proceeds as an underwriting fee.​ (which is shared proportionately between primary and secondary​ shares).

a. How much money did Metropolitan ​raise?   round to one decimal

b. How much money did the venture capitalists​ receive? round to two decimal

Solutions

Expert Solution

jeff jeffy answered 8 months ago
Next > < Previous

Related Solutions

On January​ 20, Metropolitan Inc. sold 10 million shares of stock in an SEO. The market...
On January​ 20, Metropolitan Inc. sold 10 million shares of stock in an SEO. The market price of Metropolitan at the time was $ 41.75 per share. Of the 10 million shares​ sold, 4 million shares were primary shares being sold by the​ company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.4 % of the gross proceeds as an underwriting fee. a. How much money did Metropolitan ​raise?   b....
On January​ 20, Metropolitan ​Inc., sold 10 million shares of stock in an SEO. The market...
On January​ 20, Metropolitan ​Inc., sold 10 million shares of stock in an SEO. The market price of Metropolitan at the time was $ 42.50 per share. Of the 10 million shares​ sold, 5 million shares were primary shares being sold by the​ company, and the remaining 5 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.2 % of the gross proceeds as an underwriting fee. a. How much money did Metropolitan ​raise?   b....
On January​ 20, Metropolitan Inc. sold 8 million shares of stock in an SEO. The market...
On January​ 20, Metropolitan Inc. sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $ 41.50 per share. Of the 8 million shares​ sold, 4 million shares were primary shares being sold by the​ company, and the remaining 4 million shares were being sold by the venture capital investors. Assume the underwriter charges 4.5 % of the gross proceeds as an underwriting fee. a. How much money did Metropolitan ​raise?  Round...
On January​ 20, Sullivan ​Inc., sold 10 million shares of stock in an SEO. The market...
On January​ 20, Sullivan ​Inc., sold 10 million shares of stock in an SEO. The market price of Sullivan at the time was $41.25 per share. Of the 10 million shares​ sold, 4 million shares were primary shares being sold by the​ company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 4.9% of the gross proceeds as an underwriting fee. a. How much money did Sullivan raise?   b. How much...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50%...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50% initial margin. The interest rate on the margin account is 10% annually. On April 1 (in three-months), you covered the short sales by buying stock at a price of $15 per share. You paid 50 cents per share in commissions for each transaction. Assume you received interest on all your assets, i.e. the sum of the short sale proceeds and the margin. 1. What...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50%...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50% initial margin. The interest rate on the margin account is 10% annually. On April 1 (in three-months), you covered the short sales by buying stock at a price of $15 per share. You paid 50 cents per share in commissions for each transaction. Assume you received interest on all your assets, i.e. the sum of the short sale proceeds and the margin. 1. What...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50%...
On January 1, you sold short 100 shares of XYZ stock at $20 using a 50% initial margin. The interest rate on the margin account is 10% annually. On April 1 (in three-months), you covered the short sales by buying stock at a price of $15 per share. You paid 50 cents per share in commissions for each transaction. Assume you received interest on all your assets, i.e. the sum of the short sale proceeds and the margin. 1. What...
Luther Industries sold 10 million shares of stock in a seasoned equity offering. The market price...
Luther Industries sold 10 million shares of stock in a seasoned equity offering. The market price of Luther at the time was $25 per share. Of the 10 million shares sold, 6 million shares were primary shares being sold by the company, and the remaining 4 million shares were being sold by venture capitalists. Luther's underwriters charges 5% of the total funds raised as an underwriting fee. (a) How much money did Luther Industries company raise? (4 pts.) (b) How...
On December 31, 2020, Berclair Inc. had 250 million shares of common stock and 10 million...
On December 31, 2020, Berclair Inc. had 250 million shares of common stock and 10 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 90 million shares of its common stock as treasury stock. Berclair issued a 4% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $500 million. Also outstanding at December...
Max Corp currently has 10 million shares on issue with a current stock price of $50.00...
Max Corp currently has 10 million shares on issue with a current stock price of $50.00 each. The major stockholder, I.M. Doingwell currently owns 60% of the shares. Max Corp then raises $200 million by issuing 5 million new shares to Doingwell. (a) What is the impact of the stock issue on the wealth of the other stockholders of Max Corp? (b) How would your answer change if the new shares were instead issued to a group of new investors...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT