A company decided to go public. The numbers of common shares issued and outstanding is

125,000. Net income available to common shareholders for the year amounted to 300,000.

1. Assume that the pay-out ratio is 60%, how much of the total dividends shall a shareholder

owning 10,000 common shares receive?

2. Assume that the pay-out ratio is 60% and the price per share is 20, what is the dividend yield?

3. Assume that the price-earnings ratio will be set 12 times and 25,000 new shares will be issued:

a. How much is the initial public offering per share of the 25,0000 new shares?

b. How much is the net proceeds' form issuance if underwriter spread is 12%?