Calculating Costs of Issuing Stock TriState Corp

question 2

Multiple Choice

Calculating Costs of Issuing Stock TriState Corp.recently went public with an initial public offering in which they received a total of $50 million in new capital funding.The underwriter used a firm commitment offering in which the offer price was $30 and the underwriter's spread was $1.50.TriState also paid legal and other administrative costs of $950,000 for the IPO.What is the number of shares issued through this IPO?

• A)1,698,333
• B)1,787,720
• C)1,754,386
• D)1,666,667

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Definitions:

Expected Cash Flows

Forecasted cash inflows and outflows for a business or project, often used in financial modeling to evaluate investment viability.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures.

Premium

An amount paid that is above the standard or nominal cost, often for insurance, superior goods, or to designate a higher level of service or coverage.

Coupon Rate

The interest rate stated on a bond when issued, which represents the amount of interest paid to bondholders annually.