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Present Tense Tonic Wants to Raise $13 Million to Purchase

Question 74

Multiple Choice

Present Tense Tonic wants to raise $13 million to purchase equipment by issuing new securities.Management estimates the issue will cost the firm $875,500 for accounting, legal, and other costs.The underwriting spread is 6.5 percent and the issue price is $24 per share.How many shares of stock must be sold if the firm is to have sufficient funds remaining after costs to purchase all of the desired equipment?


A) 608,010 shares
B) 521,121 shares
C) 618,338 shares
D) 647,666 shares
E) 582,139 shares

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