Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. problem 1 radio inc. is a leading multimedia compa

Problem 1 Radio Inc. is a leading Multimedia company that wants to expand its business...

90.2K

Verified Solution

Question

Finance

image

image

Problem 1 Radio Inc. is a leading Multimedia company that wants to expand its business internationally. The proposed expansion would require the firm to raise about $20.2 million in new capital. Because Radio Inc. currently has a debt ratio of 30% and because current shareholders already have all their personal wealth invested in the company, they would like to sell common stock to the public to raise the $20.2 million. However, the current shareholders want to retain voting control. The estimated pre-IPO value of equity of the company is about $63 million and there are 1.1 million of existing shares of stock held by current shareholders. The investment bank will charge a 7% spread. 5 points 1. To net $20.2 million, what is the total value of stocks that must be sold (approximately)? * a. $6.060 million O b. $10.631 million O c. $18.786 million O d. $21.720 million O e. None of the above 2. Which of the following statements is INCORRECT? a. The percentage of shares owned by new investors is 26.11% b. The new number of shares post-IPO is approximately 1,435,002 shares O c. The offer price is $55.89 per share d. The post-IPO value of the firm is $83.2 million. O e. All of the above are correct

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

      Design an algorithm for each of the exercises and type it into a word document....

Electrical Engineering
Q

Question 3. You are working in the human resource department at a large organization and your...

General Management
Q

On the planet Maximillian live Sprogs and Graks. Initially there were 2400 sprogs and 300...

Basic Math
Q

There are 5 different mathbooks, 1 social studiesbook, and 2 different sciencebooks on the shelf.How...

Basic Math
Q

Find the value of each trigonometric ratio 29 tan X 20 30 50 40 355554...

Calculus
Q

Sales price = $60 Variable cost = $30 What is the contribution margin...

Accounting
Q

How did the results of results benefit Information and Communication Technology (ICT)? be specific

Accounting
Q

The long-term liabilities section of BSU Transportation's December 31, 2020, balance sheet included the following:...

Accounting
Q

A company has current assets of $6.38 million and net income of $10.4 million. Current...

Accounting
Q

The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting...

Accounting
Q

Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other...

Accounting
Q

Jack Black is the policy owner and life insured of a 20-year term life insurance...

Finance