The Zuri Co. needs to raise $66.9 million to finance its expansion into new mark

Question

The Zuri Co. needs to raise $66.9 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is S69 per share and the company's underwriters charge a spread of 9.5 percent. How many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions of shares, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.) Number of shares offered

Explanation / Answer

Offer Price = 69
Price after including underwriter charges = P*(1-f) = 69 * ( 1- 9.5%) = 62.445
No of shares offered = Finance to be raised / Price after Price after including underwriter charges
= 66,900,000/62.445 = 1,071,342.78164 shares rounded to 1071342.78

Best of Luck. God Bless

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