Answered

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18.3 The Pre-IPO value of the firm is 60M$ and the Pre-IPO number of shares outstanding is 4 Million. Assume underwriting Spread or Flotation Cost is 5%. Determine the number of new shares issued (in millions) if gross proceeds are valued at 18 million dollars.

Hint: Find what percentage of the firm belongs to new investors after IPO and then find the number of new shares issued

Select one of the following answers:

1.2183

0.7841

2.1489

1.1234

Sagot :

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