Final answer:
To calculate the money received by XYZ Corp from the new share issuance, multiply the number of shares sold by the sale price to determine gross proceeds, then subtract the product of the number of shares sold and the per share fee charged by the investment bank.
Step-by-step explanation:
The student has asked a question related to the field of finance, specifically dealing with a scenario in which XYZ Corp has issued new shares and an investment bank has underwritten those shares on a best efforts basis. To calculate the amount of money XYZ Corp receives, we will first find the gross proceeds from the sale of the shares and then subtract the fees charged by the investment bank.
To begin with, XYZ Corp sold 9.4 million shares at $27 per share. We calculate the gross proceeds by multiplying the number of shares sold by the price per share:
- Gross proceeds = 9.4 million shares * $27 per share
Next, we find out the total underwriting fee by multiplying the number of shares sold by the fee per share charged by the investment bank:
- Underwriting fees = 9.4 million shares * $0.675 per share
Finally, to calculate the net proceeds received by XYZ Corp, we subtract the underwriting fees from the gross proceeds:
- Net proceeds = Gross proceeds - Underwriting fees
After performing these calculations, XYZ Corp will be able to determine the exact amount of money it receives from the transaction.