Bushwhacker Mowing needs $360 million to support growth

QUESTION

Bushwhacker Mowing needs $360 million to support growth. If it issues new common stock to raise the funds, the flotation (issuance) costs will be 4 percent. If Bushwhacker can issue stock at $60 per share, how many shares of common stock must be issued so that it has $360 million after flotation costs? Show how much of the issue will consist of flotation costs how much Bushwhacker will receive after flotation casts are paid?

ANSWER

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