Homework answers / question archive / Magenta Corporation wants to raise $51

Magenta Corporation wants to raise $51

Finance

Share With

Magenta Corporation wants to raise $51.3 million in a seasoned equity offering, net of all fees. Magenta stock currently sells for $10 per share. The underwriters will require a spread of $0.5 per share, and indicate that the issue must be underpriced by 5 percent. In addition to the underwriter’s fee, the firm will incur $2,300,000 in legal, accounting, and other costs. How many shares must Magenta sell? (Enter your answer in millions rounded to 3 decimal places.)