Problem $5-7$

A company wants to raise $$520$ million in a new stock issue. Its investment banker indicates that the sale of new stock will require $7$

percent underpricing and a $6$ percent spread. $($Hint: the underpricing is $7$ percent of the current stock price, and the spread is $6$

percent of the issue price.$)$

a$.$ Assuming the company's stock price does not change from its current price of $$77$ per share, what would be the issue price to the

public after underpricing? How many shares would the company need to sell?

Note: Round intermediate calculations to $2$ decimal places. Round your answers to $2$ decimal places. Enter "Number of shares"

answer in millions.

b$.$ How much money will the investment banking syndicate earn on the sale?

Note: Round intermediate calculations to $2$ decimal places. Enter your answer in millions rounded to $2$ decimal places.

Investment bankers' revenue