Raybac is about to go public. Its present stockholders own 500,000 shares. The new public issue will represent 700,000 shares. The shares will be priced at $25 to the public with a 5% spread. The out of pocket costs will be $450,000.
Required:
Question: What are the net proceeds to the firm.
a) $17,200,000
b) $18,250,000
c) $16,175,000