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19 May, 01:50

The Whistling Straits Corporation needs to raise $91 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $65 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold?

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  1. 19 May, 02:14
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    The Whistling Straits Corporation needs 1,498,000 shares to be sold to raise $91 million.

    Explanation:

    Total Finance Needed = $91,000,000

    Offer price per share = $65 per share

    Charges of underwriter = 7%

    Total Number of shares needed to be sold = ($91,000,000 / $65) x 107%

    Total Number of shares needed to be sold = 1,400,000 x 107%

    Total Number of shares needed to be sold = 1,498,000 shares

    The Whistling Straits Corporation needs 1,498,000 shares to raise $91 million.
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