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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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Solution Summary

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

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Answer (see attachment).

amount needed 1000000
flotation cost 15 per ...

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