[1]. Beedles Inc. needed to raise $14 million in an IPO and chose Security Brokers Inc. to underwrite the offering. The agreement stated that Security Brokers would sell 3 million shares to the public and provide $14 million in net proceeds to Beedles. The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $300,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answers to the nearest dollar. Loss should be indicated by a minus sign.

a. $5 per share?

$__________

b. $6 per share?

$ ___________

c. $4.25 per share?

$ ___________

[2.] The Beranek Company, whose stock price is now $30, needs to raise $23 million in common stock. Underwriters have informed the firm's management that they must price the new issue to the public at $25 per share because of signaling effects. The underwriters' compensation will be 7% of the issue price, so Beranek will net $23.25 per share. The firm will also incur expenses in the amount of $155,000. How many shares must the firm sell to net $23 million after underwriting and flotation expenses? Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest whole number.

_______________shares

[3.] Benjamin Garcia's start-up business is succeeding, but he needs $207,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $828,000 and the angel has agreed to invest the $207,000 that is needed. Benjamin presently owns all 38,000 shares in his business. Because the stock will be sold directly to an investor, there is no spread; the other flotation costs are insignificant.

What is a fair price per share? Do not round intermediate calculations. Round your answer to the nearest cent.

$________________

How many additional shares must Benjamin sell to the angel? Do not round intermediate calculations. Round your answer to the nearest whole number.

_______________shares

[4.] Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $58 million. Zang currently has 4 million shares outstanding and will issue 1.3 million new shares. ESM charges a 9% spread.

What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.

$__________________

How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

$ ___________________