Explore BrainMass

Explore BrainMass

    Problem 15-14: Underwriting Costs (Wilson Sporting Goods)

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Problem 15-14: Underwriting Costs (Wilson Sporting Goods)

    Wilson Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $18 per share for 600,000 shares. The company will receive $16.50 per share and will incur $150,000 in registration, accounting, and printing fees.

    a. What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value (at retail)?

    b. If the firm wanted to net $18 million from this issue, how many shares must be sold?

    © BrainMass Inc. brainmass.com March 7, 2023, 10:30 am ad1c9bdddf


    Solution Summary

    A formatted MS Excel spreadsheet is attached, containing detailed, step-by-step instructions for the calculation of the underwriting costs for the Wilson Sporting Goods Problem (15-14).