Calculating Costs of Issuing Stock Mick E Inc

question 108

Multiple Choice

Calculating Costs of Issuing Stock Mick E Inc.plans to issue 25 million new shares of its stock.In discussions with its investment bank,Mick E learns that the bankers recommend a net proceed of $29.80 per share and they will charge an underwriter's spread of 8.5 percent of the gross proceeds.In addition,Mick E must pay $3 million in legal and other administrative expenses for the seasoned stock offering.Calculate the gross proceeds per share received by Mick E from the sale of the 25 million shares of stock.

• A)$29.80
• B)$32.45
• C)$32.57
• D)$32.70

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Definitions:

USB

Abbreviation for Universal Serial Bus, a standard technology for connecting peripherals to a computer, enabling communication and power supply.

Ethernet

A group of computer networking technologies frequently utilized in local area networks (LAN), metropolitan area networks (MAN), and wide area networks (WAN).

DVI

A video interface technology designed to maximize the visual quality of digital display devices such as monitors and projectors.

VGA

Video Graphics Array, a standard for computer video display hardware resolution and color depth.