Miller Venture Capital made a $5 million investment in Bavarian Sausage Technology (BST) 8 years ago and in return received 1 million shares of convertible preferred stock that can be converted into 2 shares of common stock. After all stock has been converted BST will have 15 million shares outstanding. In addition, the company is planning on issuing an additional 3 million shares in an IPO. If BST's offer price is $20, what is the value of the offering if the investment banks underwriting the IPO charge a 7% underwriting spread?

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Heres how to calculate the value of the offering 1 Calculate the number of common shares after conve... View the full answer