Determining the expansion needs


Wear Ever is expanding and needs $12.6 million to help fund this growth. The firm estimates it can sell new shares of stock for $32.50 a share. It also estimates it will cost an additional $340,000 for filing and legal fees related to the stock issue. The underwriters have agreed to a 7.5 percent spread. How many shares of stock must Wear Ever sell if it is going to have $12.6 million available for its expansion needs?

A. 370,376 shares

B. 419,127 shares

C. 430,437 shares

D. 454,209 shares

E. 461,806 shares

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Finance Basics: Determining the expansion needs
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