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    Flotation Cost: How Many Shares Will Be Issued?

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    The firm needs to raise $10 million. Assuming that flotation costs are expected to be $15 per share, and that the market price of the stock is $120, how many shares would have to be issued? What is the dollar size of the issue?

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    Answer (see attachment).

    amount needed 1000000
    flotation cost 15 per ...

    Solution Summary

    The solution determines the flotation cost, finding how many shares will be issues and the dollar amount of the issue.