On January20, Whalen Inc., sold 8 million shares of stock in an SEO. The market price of Whalen at the time was $42.25 per share.
View the step-by-step solution to:

Question

On January​ 20, Whalen ​Inc., sold 8 million shares of stock in an SEO. The market price of Whalen at the

time was $42.25 per share. Of the 8 million shares​ sold, 5 million shares were primary shares being sold by the​ company, and the remaining 3 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.3% of the gross proceeds as an underwriting fee.


a. How much money did Whalen ​raise?  

b. How much money did the venture capitalists​ receive?

c. If the stock price dropped 2.4% on the announcement of the SEO and the new shares were sold at that​ price, how much money would Whalen ​receive?

Top Answer

a. $211.25 million b.... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question