Purchase Solution

Net Proceeds

Not what you're looking for?

Ask Custom Question

The Conely Corporation is about to go public. It currently has after tax earnings of $7,500,000, and 2,500,000 shares are owned by the present stockholders (the Conely family). The new public issue will represent 600,000 new shares. The new shares will be priced to the public at $20 per share, with a 5 percent spread on the offering price. There will also be $200,000 in out-of-pocket costs to the corporation. Compute the net proceeds to the Conely Corporation.

Purchase this Solution
Solution Summary

The solution explains how to calculate the net proceeds of a public issue of shares

Solution Preview

The new issue is 600,000 new shares and the price is $20 per share. The total issue size is 600,000 X 20 = 12,000,000.

The spread is 5% of the ...

Purchase this Solution
Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

View More Free Quizzes
Related BrainMass Solutions

  • Face Value of Debt

    Calculate the net proceeds of public issue. (Enter your answer in dollars not in millions.) Net proceeds of public issue= $ _____________ a-2. Calculate the net proceeds of private placement.

  • New issue of stock

    Net proceeds = Total cash raised - spread - registration costs The net proceeds = 300,000X60 - 300,000X60X8.5%-150,000 Net Proceeds = $16,320,000 (c) What rate of return must be earned on the net proceeds so that no dilution of earnings per share

  • New stock issue

    Given the same net income, The new EPS = 3,000,000/1,050,000=$2.86 The potential dilution is 4.00-2.86 = $1.14 (b) Compute the net proceeds to Houston Corp. The net proceeds are after all the expenses.

  • What are the Net Proceeds if Northern Airlines goes public?

    -6000000=1095000 Required rate of return = 1095000/5084000=0.2154 or 21.54% The solution determines net proceeds of northern airlines.

  • Houston Corp: Issuance of new stock and rate of return

    Net proceeds = 18,000,000-18,000,000X8.5% - 150,000 Net proceeds = $16,320,000 (c) What rate of return must be earned on the net proceeds so that no dilution of earnings per share occurs? The rate should be such that the EPS remains at $4.

  • New Issue

    Determine what rate of return must be earned on the proceeds to the corporation so there will be a 5 percent increase in earnings per share during the year of going public. a. Compute the net proceeds to the Corporation.

  • Sale of depreciable asset

    96979 Sale of Depreciable Asset When a depreciable asset is sold: a gain arises if the sales proceeds exceed the net book value. a loss arises if the sales proceeds exceed the net book value.

  • Computing the Net Proceeds of an IPO

    Again, Net proceeds=(number of shares issued*(selling price*(1-spread)))-direct costs Net proceeds=(1,655,914*($22*(1-.07)))-$800,000 Net proceeds= $33,880,000.44-$800,000 Net proceeds= $33,080,000.44 c.

  • compensation plan

    The percentage can be a small pie, say 5% of the total net proceeds of the doctor. Therefore, if the doctor makes 80,000, he will pay 4000 to the hospital and if he makes 110,000 in net proceeds, he will pay 5500 to the hospital.

View More Related Solutions