A company currently has net income of 3 million and 1.5 million common shares outstanding which sell for $20.00/share The company has decided to issue new stock to raise $4,000,000 to expand its operation. The company investment banker will sell the stock for $18.00 with a spread of 7% . there will be a $60,000 registration cost We need to calculate the following: (a). calculate current EPS and PE ratio, (b). How many shares will have to be sold to new $4million? c) Calculate new EPS and stock price immediately after the sale if the PE ratio remains constant
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