A company plans to issue a new common stock with a par value of $1 per share.
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A company plans to issue a new common stock with a par value of $1 per share. The company expects to receive $20 million in total from the stock issue, and it plans to issue 4 million new shares. The underwriter charges a commission of 5% on the total amount raised. What is the cost of capital to the company after underwriting expenses? Show all calculations and assumptions.
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
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