Discussion Prompt 1 – Module 5 Case Study Question 2: Review Question 2 in the Module 5 case study (the question is displayed below). From your submitted response to Question 2 (the full question is displayed below), briefly summarize your list of the advantages and disadvantages of increasing the size to $100 million. Then, briefly describe your recommendation: would you recommend raising $75 million, $100 million, or some other number? What is the rationale for your response?
Case Study Question 2: Case Study Question 2: During the discussion of the potential IP and East Coast Yacht’s future, Dan states that he feels the company should raise $75 million. However, Larissa points out that if the company needs more cash soon, a secondary offering close to the IPO would be potentially problematic. Instead, she suggests that the company should raise $100 million in the IPO. How can we calculate the optimal size of the IPO? What are the advantages and disadvantages of increasing the size of the IPO to $100 million?
Discussion Prompt 2 – Module 5 Case Study Question 4: Review Question 4 in the Module 5 case study (the question is displayed below). Briefly summarize your submitted response to question 4. Describe the rationale behind your advice and your suggestions.
Case Study Question 4: Many of the employees of East Coast Yachts have shares of stock in the company because of an existing employee stock purchase plan. To sell the stock, the employees can tender their shares to be sold in the IPO at the offering price, or the employees can retain their stock and sell it in the secondary market after East Coast Yachts goes public (once the 180-day lockup period expires). Larissa asks you to advise the employees about which option is best. What would you suggest to the employees?