Highlander Homes shares trade at $32 per share and there are 50 million shares outstanding. The management would like to issue a total of 8 million (primary and secondary)shares in an SEO. If the underwriter charges 5% of gross proceeds, 75% of the shares are primary shares sold to new investors, and 25% of the shares are secondary shares sold to new investors, what percentage of the company will be owned by the new investors?

Question

Quizplus · Accepted Answer

The new investors will own 8 million shares out of a total of 58 million shares (50 million existing + 8 million new), which is approximately 13.79%.

Highlander Homes Shares Trade at $32 Per Share and There