Calculating Costs of Issuing Stock Beach Stuff,Inc

question 21

Multiple Choice

Calculating Costs of Issuing Stock Beach Stuff,Inc.,needs to raise $10 million in new capital funding from a seasoned equity offering.In discussions with its investment bank,Beach Stuff learns that the bankers recommend a gross price of $20.00 per share and they will charge an underwriter's spread of $1.75 of the gross price.In addition,Beach Stuff must pay $1.5 million in legal and other administrative expenses for the seasoned stock offering.What is the number of shares of stock that Beach Stuff will need to sell to raise the $10 million?

• A)630,137
• B)575,000
• C)500,000
• D)547,946

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for quick action in emergencies; the "fight or flight" response system.

Parasympathetic Nervous System

Part of the autonomic nervous system that conserves energy by slowing the heart rate, increasing intestinal and gland activity, and relaxing sphincter muscles.

Dopamine

Dopamine is a neurotransmitter in the brain that plays a key role in managing rewards, motivation, pleasure, and motor function.

Phineas Gage

A historically significant individual in the study of neuroscience and psychology, known for surviving a severe brain injury that altered his personality and behavior.