Calculate the gross proceeds needed


Problem:

A company is planning to go public. Currently, the pre-IPO value of the firm's equity is $95 million, the number of outstanding shares is 3.5 million, the company need to raise $17 million, and the floatation cost of new equity is 12%.

Required:

Question 1: Calculate the gross proceeds needed from an IPO given the following information.

Question 2: What is the post-IPO equity value?

Question 3: What is the offer price?

Note: Provide support for your rationale.

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Accounting Basics: Calculate the gross proceeds needed
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