Calculating Costs of Issuing Stock WuShock,Inc

question 113

Multiple Choice

Calculating Costs of Issuing Stock WuShock,Inc.,needs to raise $500 million to finance its plan for nationwide expansion.In discussions with its investment bank,WuShock learns that the bankers recommend an offer price (or gross price) of $50 per share and they will charge an underwriter's spread of $2.00 per share.Calculate the net proceeds to WuShock from the sale of stock.How many shares of stock will WuShock need to sell in order to receive the $500 million they need?

• A)10,000,000
• B)10,416,667
• C)250,000,000
• D)500,000,000

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World Price

The global market price of a product or service, determined by worldwide demand and supply.

Infant Industries

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Economic policy of restricting imports from other countries through methods such as tariffs and import quotas, to protect domestic industries.

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