Money will investment banking syndicates earn on the sale

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Himmel Corp. wants to raise $100 million in a new stock issue. Its investment banker indicates that the sale of new stock will require 12 percent underpricing and a 7 percent spread. (Hint: The underpricing is 12 percent of the current stock price, and the spread is 7 percent of the issue price.)

a. Assuming Himmel's stock price does not change from its current price of $50 per share, how many shares must the company sell and at what price to the public?

b. How much money will the investment banking syndicates earn on the sale?

Reference no: EM131448618

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