Wandou Inc. is a leading Chinese manufacturing company that provides a wide range of home, office...
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Wandou Inc. is a leading Chinese manufacturing company that provides a wide range of home, office and garden furniture. It wants to expand its business internationally. The proposed expansion would require the firm to raise about $15 million in new capital. Because Wandou currently has a debt ratio of 45% and because current shareholders already have all their personal wealth invested in the company, they would like to sell common stock to the public to raise the $15 million. However, the current shareholders want to retain voting control. The estimated pre-IPO value of equity of the company is about $65 million and there are 6.5 million of existing shares of stock held by current shareholders. The investment bank will charge a 7% spread. 1. To net $15 million, what is the total value of stocks that must be sold (approximately)? * 2. What percentage of shares will the new investors require? 3. How many shares will the new investors require (approximately)? 4. What is the estimated offer price per share? * 5. What is the total post-IPO value of equity? * Wandou Inc. is a leading Chinese manufacturing company that provides a wide range of home, office and garden furniture. It wants to expand its business internationally. The proposed expansion would require the firm to raise about $15 million in new capital. Because Wandou currently has a debt ratio of 45% and because current shareholders already have all their personal wealth invested in the company, they would like to sell common stock to the public to raise the $15 million. However, the current shareholders want to retain voting control. The estimated pre-IPO value of equity of the company is about $65 million and there are 6.5 million of existing shares of stock held by current shareholders. The investment bank will charge a 7% spread. 1. To net $15 million, what is the total value of stocks that must be sold (approximately)? * 2. What percentage of shares will the new investors require? 3. How many shares will the new investors require (approximately)? 4. What is the estimated offer price per share? * 5. What is the total post-IPO value of equity? *
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Answer to Question Given Notes 1 New Capital Required 15 million Pre IPO value of equity shares of S... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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