Husker's Tuxedos, Inc., needs to raise $135 million to finance its plan for nationwide expansion. In discussions with its investment bank, Husker's learns that the bankers recommend an offer price (or gross price) of $43.55 per share and they will charge an underwriter's spread of $2.25 per share. Calculate the net proceeds to Husker's from the sale of stock. How many shares of stock will Husker's need to sell in order to receive the $135 million they need?

Question

Quizplus · Accepted Answer

The net proceeds per share are $43.55 - $2.25 = $41.30. To raise $135 million, Husker's needs to sell $135,000,000 / $41.30 ≈ 3,268,766 shares.