Calculating Costs of Issuing Stock Wildcat, Inc

question 9

Multiple Choice

Calculating Costs of Issuing Stock Wildcat, Inc., needs to raise $750 million to finance its plan for nationwide expansion. In discussions with its investment bank, Wildcat's learns that the bankers recommend an offer price (or gross price) of $25 per share and they will charge an underwriter's spread of $1.50 per share. Calculate the net proceeds to Wildcat's from the sale of stock. How many shares of stock will Wildcat's need to sell in order to receive the $750 million they need?

• A) 30,000,000
• B) 31,914,894
• C) 500,000,000
• D) 750,000,000

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