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18-2 : 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

18-2: 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 $800 million. Zang currently has 20 million shares outstanding and will issue 5 million new shares. ESM charges a 5% spread. What is the correctly valued offer price? How much cash will Zang raise net of the spread?

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