Answer:
Let x denote the no of shares of common stock to be issued by UUU at a price of $25 per share
Therefore, the total money raised is $24 * x
Given that UUU has to incur flotation cost of 8% plus additional costs of $280,000, the total flotation costs work out to $25 * x * 0.08 + $280,000
Since UUU needs $192 million, calculation of the value of x is as follows:
$25 * x - ($25 * x * 0.08 + $280,000) = $192 million
$25 * (1-0.08) * x = $192 million + $280,000
x = 192.28 million/25 * 0.92
x = 8.36 million
Therefore, UUU has to issue 8,360,000 shares of common stock at $25 to obtain its funding need of $192 million
The flotation costs would be $25 * 8,360,000 * 0.08 + $280,000 = $17 million
Out of the total money raised of 8,360,000 * $25 = $209 million, after deducting the flotation costs of $17 million, UUU will receive $192 million
