The Norman Company needs to raise $50 million of new equity capital. Its common stock is currently selling for $50 per share. The investment bankers require an underwriting spread of 3 percent of the offering price. The company's legal, accounting and printing expenses, associated with the seasoned offering, are estimated to be $750,000. How many new shares must the company sell to net $50 million.

Well, the Norman Company needs to raise $50 million, but they also have to consider the underwriting spread of 3 percent. So, they'll have to sell a few more shares to cover that spread.

Let's do some calculations. The underwriting spread would amount to 3 percent of the offering price, which is $50 per share. That would be $1.50 per share.

To figure out how many new shares they need to sell, we can divide the total amount they need to raise ($50 million) by the offering price per share ($50).

$50 million divided by $50 equals 1 million.

So, they need to sell 1 million new shares.

Now, let's also consider the company's legal, accounting, and printing expenses, which are estimated to be $750,000. This cost needs to be subtracted from the net amount they want to raise.

$50 million minus $750,000 equals $49,250,000.

Therefore, the Norman Company needs to sell approximately 1 million new shares to net $49,250,000 (after deducting expenses).

To calculate the number of new shares the company must sell to net $50 million, we need to consider the expenses associated with the offering.

1. Calculate the underwriting spread:
Underwriting Spread = 3% of the Offering Price
= 3/100 * $50 per share
= $1.50 per share

2. Calculate the total expenses associated with the offering:
Total Expenses = Underwriting Spread + Legal, Accounting, and Printing Expenses
= $1.50 per share + $750,000
= $1.50 per share + $750,000
= $750,001.50

3. Determine the net proceeds from the offering:
Net Proceeds = Total Fund Required + Total Expenses + Underwriting Spread
= $50 million + $750,001.50
= $50,750,001.50

4. Calculate the number of shares to be sold:
Number of Shares = Net Proceeds / Sale Price per Share
= $50,750,001.50 / $50 per share

Therefore, the company must sell approximately 1,015,000 new shares to net $50 million.

To determine the number of new shares the company must sell to net $50 million, we need to consider the underwriting spread and the expenses associated with the offering.

Step 1:
Calculate the underwriting spread, which is 3% of the offering price. We know that the offering price per share is $50.
Underwriting spread = 3% * $50 = $1.50 per share

Step 2:
Deduct the underwriting spread from the offering price to get the net proceeds per share.
Net proceeds per share = Offering price per share - Underwriting spread
Net proceeds per share = $50 - $1.50 = $48.50

Step 3:
Calculate the total amount of money the company needs to raise after deducting expenses. The expenses associated with the offering are estimated to be $750,000.
Total amount needed to raise = Amount needed to net $50 million + Expenses
Total amount needed to raise = $50 million + $750,000 = $50,750,000

Step 4:
Determine the number of new shares the company must sell by dividing the total amount needed to raise by the net proceeds per share.
Number of new shares = Total amount needed to raise / Net proceeds per share
Number of new shares = $50,750,000 / $48.50

Calculating this division will give us the answer: