Look at the illustrative new-issue prospectus in the appendix. a. Is this issue a primary offering, a
Question:
Look at the illustrative new-issue prospectus in the appendix.
a. Is this issue a primary offering, a secondary offering, or both?
b. What are the direct costs of the issue as a percentage of the total proceeds?
c. Are these direct costs more than the average for an issue of this size?
d. Suppose that on the first day of trading the price of Hotch Pot stock is $15 a share. What are the total costs of the issue as a percentage of the market price?
e. After paying her share of the expenses, how much will the firm's president, Emma Lucullus, receive from the sale?
f. What will be the value of the shares that Emma Lucullus retains in the company?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Question Posted: