Question: FARO Technologies, whose products include portable 3D measurement equipment, recently had 25 million shares outstanding trading at $40 a share. Suppose the company announces its

FARO Technologies, whose products include portable 3D measurement equipment, recently had 25 million shares outstanding trading at $40 a share. Suppose the company announces its intention to raise $280 million by selling new shares.

a. What percentage of the value of FAROs existing equity prior to the announcement is this expected gain or loss?

b. At what price should FARO expect its existing shares to sell immediately after the announcement?

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