GSM Corporation sold 20 million shares of common stock in a seasoned offering. The market price of the company’s shares immediately before the offering was $14.75. The shares were offered to the public at $14.50, and the underwriting spread was 4%. The company’s expenses associated with the offering were $7.5 million. How much new cash did the company receive?
Answer to relevant QuestionsAfter a banner year of rising profits and positive stock returns, the managers of Raptor Pharmaceuticals Corporation (RPC) decided to launch a seasoned equity offering to raise new equity capital. RPC currently has 10 ...In what way did M&M change their conclusion regarding capital structure choice with the additional assumption of corporate taxes? In this context, what composes the difference in value between levered and unlevered firms? What are the trade-offs in the agency cost/tax shield trade-off model? How is the firm’s optimal capital structure determined under the assumptions of this model? Does empirical evidence support this model? An unlevered company operates in perfect markets and has net operating income (EBIT) of $250,000. Assume that the required return on assets for firms in this industry is 12.5 percent and that the firm issues $1 million worth ...Soonerco has net operating income of $2.5 million per year, and $15 million of debt outstanding with a required return (interest rate) of 8 percent. The required rate of return on assets in this industry is 12.5 percent, and ...
Post your question