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Question
Devine Linens (DL) must raise $14,000,000 to support future growth. If it raises the funds by issuing stock, DL must pay an investment banker 5 percent of the total amount issued plus $250,000 in other costs associated with the issue. What is the amount of stock that DL must issue to net $14,000,000 after flotation costs?
a. $14,962,500
b. $14,950,000
c. $14,737,092
d. $15,000,000
e. $13,537,500
Answer
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