20151007061731intercat - a InterCat Janet Richards fixes...

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InterCat Janet Richards fixes her eyes on those of her partner Gilbert Baker and says firmly, “Alright. Let’s do it.” And with those words, InterCat, a firm that specialises in the design and maintenance of Internet catalogues for small consumer businesses founded by Janet and Gilbert immediately after completing their MBA, will be going public. InterCat now employs 50 individuals, with the majority of them computer programmers and analysts. Many of the employees have followed the high-technology market very closely and have decided that since high-tech firms are more understood and valued in the United States than in other countries, InterCat should issue its stock only in the United States. The new issue will comprise five million shares. The IPO Project The task the company has ahead of itself is certainly daunting. Janet and Gilbert know that many steps have to be completed in the process of making an initial public offering (IPO). They also know that they need to complete the process as soon as possible because they need the new capital fairly soon to ensure that InterCat has the resources to capture valuable new business from its competitors and continue growing. They also value a speedy IPO because they believe that despite the recent slump in stocks, there still is a good opportunity for obtaining a good stock price. Actually, few companies offering Web page design services have gone public so far, and because the public is getting more and more enthusiastic about on-line shopping, they believe that the IPO should come as quickly as possible. Janet and Gilbert decide to map the steps in the process of making an IPO. They list each major activity that needs to be completed and the dependencies between the various activities. They list, for each activity, on which other activities it depends, in the sense that it can only be executed when all of these predecessor activities have been completed. They also list an estimate for the time needed to complete each activity, and its estimated cost. The list is shown in the table below. Janet and Gilbert decide to start with the process first thing next Monday, December 15 2008 , and would like to plan the project using a standard 5-day working week, as most of their employees are on standard contracts (no stock options, except for a few key people) and are, in general, not very willing to work during weekends. a
Activity (short name in capitals) Preceding Activities Time (weeks) Cost ($) E VALUATE the prestige of potential UNDERWRITERS 3 8,000 S ELECT a SYNDICATE of underwriters Evaluate the prestige of potential underwriters 1.5 4,500 N EGOTIATE the

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