How much the underwriter would receive from share offering

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A company needs to raise $30 million (this is the gross amount required by the company) from a share offering. The shares are underwritten at a fee of 6.5% of the total amount raised. The underwriter offers best-effort underwriting. Answer the following questions ignoring all other costs in the share offering.

Problem 1: If the company receives subscription for 100% of the total shares offered, calculate how much the company would receive from the share offering.

Problem 2: If the company only receives subscription for 96% of the total shares offered, calculate how much the company would receive from the share offering.

Problem 3: If the company only receives subscriptions for 96% of the total shares offered, calculate how much the underwriter would receive from the share offering.

Reference no: EM132773110

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