Business, 11.02.2020 21:49 hrijaymadathil

The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $18.50 for each of the 20 million shares sold. The initial offering price was $22.80 per share, and the stock rose to $24.60 per share in the first few minutes of trading. Raven paid $580,000 in direct legal and other costs and $190,000 in indirect costs. What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) Flotation cost %

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Answer from: joey4843

46.79%

Explanation:

Net amount raised = Sale Proceeds - Direct Legal Costs - Indirect Costs

Net amount raised = ($18.50 x $20,000,000) - $580,000 - $190,000

Net amount raised = $370,000,000 - $770,000

Net amount raised = $369,230,000

Share offered at price = $22.80 per share

Amount received per share = $18.50

Underwriting spread = $22.80 - $18.50 = $4.30 per share

Total underwriting spread = Underwriting spread x no. of shares offered

Total underwriting spread = $4.30 x 20,000,000

Total underwriting spread = $86,000,000

Direct cost = Total underwriting spread + Direct Legal Costs

Direct cost = $86,000,000 + $580,000

Direct cost = $86,580,000

Indirect cost = Indirect cost + Total underwriting spread

Indirect cost = $190,000 + ($22.80 - $18.50) x $20,000,000

Indirect cost = $190,000 + $86,000,000

Indirect cost = $86,190,000

Total Debt Capital = Direct Cost + Indirect Cost

Total Debt Capital = $86,580,000 + $86,190,000

Total Debt Capital = $172,770,000

Flotation cost % = Total Debt Capital / Equity Capital raised

Flotation cost % = $172,770,000 / $369,230,000 x 100

Flotation cost % = 46.79%

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

Answer from: Quest

they work in some type of way

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The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $18.50 for eac...

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