Youngwood's Wants to Raise Funds for an Expansion Project by Issuing

Youngwood's wants to raise funds for an expansion project by issuing new equity shares.Management estimates the issue will cost the firm $246,000 for direct issue costs.The underwriting spread is 7.75 percent and the issue price is $14 per share.The firm has determined that 266,822 shares of stock must be sold for the firm to receive sufficient funds for the expansion.What is the expansion cost?

A) $2,950,001
B) $3,200,006
C) $3,350,002
D) $3,000,004
E) $3,140,008

Correct Answer:

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