Zoom Delivery Ltd, an online parcel delivery service is
expanding rapidly after the pandemic caused by Covid-19. It is
planning to raise $35 million (this is the net amount required) to
finance its business expansion. The offer price is $20 per share to
the public and the underwriter charges 7% spread with a standby
underwriting arrangement.

i. How many shares does the company have to issue to achieve its
capital raising goal?

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ii. Assume that the issue becomes unsuccessful, as they only
receive 95% subscriptions of the total number of shares offered.
What would be the total proceeds and how much would the company and
the underwriter receive respectively?


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