1).Calculating Costs of Issuing StockVideo Games, Inc., with the help of its investment bank recently issued 10.12 million shares of new stock. The offer price on the stock was $48.10 per share and Video's received a total of $458,500,000 through this stock offering. Calculate the net proceeds and the underwriter's spread on the stock offering. What percentage of the gross price is the investment bank charging Video for underwriting the stock issue? (Round your intermediate calculations and final answer to 2 decimal places.)

2).Calculating Costs of Issuing StockPaige's Purses, Inc. needs to raise $25.00 million to finance plant expansion. In discussions with its investment bank, Paige's learns that the bankers recommend an offer price (or gross proceeds) of $50 per share and Paige's will receive $45.00 per share. What is the underwriter's spread per shareon the issue?

3). Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time: 0 1 2 3

Project A

Cash Flow -20,000 10,000 30,000 1,000

Project B

Cash Flow -30,000 10,000 20,000 50,000

Use the discounted payback decision rule to evaluate these projects; which one(s) should it be accepted or rejected?

4). Compute the Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 10 percent and the maximum allowable payback is 4 years.

Time: 0 1 2 3 4 5

Cash flow: -2,900 900 550 800 775 575

5). Compute the NPV for Project X with the cash flows shown below if the appropriate cost of capital is 10 percent.

Time: 0 1 2 3 4 5

Cash flow: -100 -100 0 150 125 100