Question

The stockholders in a company own 500 shares. There is a new public issue is there with 600 shares. Each share price will be traded at $20 with a 4% spread. The costs will be $400,000. Calculate the net proceeds?

Answer 1

SAVE TAXPAYERS' MONEY.

INCREASE FLEXIBILITY.

IMPROVE SERVICE QUALITY.

INCREASE EFFICIENCY AND INNOVATION.

ALLOW POLICYMAKERS TO STEER, RATHER THAN ROW.

STREAMLINE AND DOWNSIZE GOVERNMENT.

IMPROVE MAINTENANCE.

Answer 2

The net proceeds is $11,120

Explanation:

The calculation is shown below:

= Total cash inflow - spread amount - cost

where,

Total cash inflow would be

= 600 shares × $20

= $12,000

The Spread amount would be

= $12,000 ×4%

= $480

And, the cost is $400

The cost amount which is given is wrong and it is a typing error. Kindly ignored it

So, the net proceeds would be

= $12,000 - $480 - $400

= $11,120

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Stockholders in a company own 500 shares. There is a new public issue is there with 600 shares. Each share price will be traded at $20 with a 4% spread. The costs will be $400,000. Calculate the net proceeds?

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