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Himmel Corp. wants to raise $100 million in a new stock issue

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Exam #1 Problem:
Himmel Corp. wants to raise $100 million in a new stock issue. Its investment banker indicates that the sale of new stock will require 12 percent underpricing and a 7 percent spread. (Hint: The underpricing is 12 percent of the current stock price, and the spread is 7 percent of the issue price.)
a. Assuming Himmel's stock price does not change from its current price of $50 per share, how many shares must the company sell and at what price to the public?
b. How much money will the investment banking syndicates earn on the sale?
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