Question: The Mitchell Company needs to raise 50 million of new
The Mitchell Company needs to raise $50 million of new equity capital. Its common stock is currently selling for $50 per share. The investment bankers require an underwriting spread of 3% of the offering price. The company’s legal, accounting, and printing expenses, associated with the secondary offering, are estimated to be $750,000. How many new shares must the company sell to net $50 million?
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