The Valhalla Corporation needs to raise $73 million to finance its expansion int

Question

The Valhalla Corporation needs to raise $73 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. If the offer price is $70 per share and the company’s underwriters charge a spread of 8 percent, how many shares need to be sold? (Do not round intermediate calculations and round your final answer to nearest whole number. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Number of shares offered

Explanation / Answer

Fund required=$73000000

Share price=$70 per share

Underwriter charges 8%

73000000=x(1-.08)

X=79347826.08695

Number of shares =X/Share price=1133540 shares

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