Question: please help! The problem requires you to use File CO3 on the computer problem spreadsheet. Diction Publishing estimates thar it needs $500,000 to support its
The problem requires you to use File CO3 on the computer problem spreadsheet. Diction Publishing estimates thar it needs $500,000 to support its expected growth. The underwriting fees charged by the investment banking firm for which you work are 6.5% for such issue sizes. In addition, it is estimated that Diction will incur $4,900 in other expenses relared to the IPO. a. If your analysis indicates that Diction's stock can be sold for $40 per share, how many shares must be issued to net the company the $500,000 it nceds? b. Suppose that Diction's investment banker charges 10% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the $500,000 it needs? c. Suppose that Diction's investment banker charges 8.2% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the $500,000 it needs? d. Suppose everything is the same as originally presented, except Diction will incur $5,835 in other expenses rather than $4,900. In this situation, how many shares must Diction issue to net the company the $500,000 it needs? e. Now suppose that Diction decides it only needs $450,000 to support its growth. In this case, its investment banker charges 7% flotation costs, and Diction will incur only $3,840 in other expense. How many shares must Diction issue to net the company the $450,000 it needs? f. Suppose the scenario presented in part (e) exists, except the price of Diction's stock is $32 per share. How many shares must Diction issue to net the company the $450,000 it needs
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