Pc Unlimited wishes to go public by issuing 20 million shares of common stock at an offer price 14.63 each. Skrail underwriters will charge 6.5 % underwriting fees.
1. How much will PC Unlimited raise in cash, assuming that all the shares sell?
2- If PC Unlimited wishes to raise $250 million in cash, what proportion of its initial offering must be sold?
3- Assume purchased shares at the IPO price and then sold after one year for 3.42 each. What is your after tax return if you are in the 15% bracket for capital gains?
1. Total Cash:
Total receipt from sale: 20 million* 14.63= 292600000
Less: Underwriting commission= 6.5% of 19019000
Net receipts for PC: 273581000 or 273.58 million approximately.
2. To Raise 250 million cash, we need to raise:
Discusses mini case related to sale of equity.
Business Management: Evaluating Performance
Having previously identified the location of its Greenfield investment, Acme, a multi-billion public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your job is to explain to this committee some of the financial aspects of this acquisition.
Deliverable: At the next steering committee meeting, you will provide a detailed presentation of the characteristics of the various external financing alternatives, including the advantages and disadvantages of each. Your report should conclude with a recommendation of which alternative (or combination of alternatives) should be used to finance the overseas investment.View Full Posting Details