Reference no: EM132685192

Calculating Costs of Issuing Stock : Video Games, Inc., with the help of its investment bank recently issued 10.17 million shares of new stock. The offer price on the stock was $48.35 per share and Video's received a total of $463,500,000 through this stock offering. Calculate the net proceeds and the underwriter's spread on the stock offering. What percentage of the gross price is the investment bank charging Video for underwriting the stock issue? (Round your intermediate calculations and final answer to 2 decimal places.)

Calculating Costs of Issuing Debt : Home Improvement, Inc. needs to raise $3.90 million to finance plant expansion. In discussions with its investment bank, Home Improvement learns that the bankers recommend a debt issue with a gross proceeds of $1,000 per bond and they will charge an underwriter's spread of 10 percent of the gross proceeds. How many bonds will Home Improvement need to sell in order to receive the $3.90 million they need?

Calculating Fees on a Loan Commitment : During the last year you have had a loan commitment from your bank to fund inventory purchases for your small business. The total loan available was $1,140,000, of which you took down $890,000. It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $890,000) of $8,340 on this loan commitment. You remember that the up-front fee was 60 basis points, what is the back-end fee on this loan commitment.