After underwriting and flotation expenses

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Derek Incorporated recently developed an electric car which contains robot technology for self-driving. The owner was original employed by Tesla and was previously sued for violating confidentiality clauses specific to development of Tesla; however, that was resolved out-of-court. Derek Inc. needs to raise $52 million in common stock. Underwriters (have informed the firm’s management that they must price the new issue to the public at $26.50 per share because of signaling effects. The underwriters’ compensation will be 7% of the issue price. The firm will also incur expenses in the amount of $325,000. How many shares must the firm sell to net $12 million after underwriting and flotation expenses?

Reference no: EM131025596

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