A firm can invest $252 million to finance an expansion project that will generate $30 million cash flows each year forever with a WACC_project = 10%. The firm's existing debt is $70 million, and its current earnings are $23.8 million, and EBITDA is $27 million. P/E and V/EBITDA ratios of similar firms without debt are 14 and 12.2, respectively.

1) If an investment bank helps the firm raise the equity capital and charges minimum issuing costs of $35 million while it is a fair deal for investors, which fraction of ownership can the issuing firm reasonably retain after this issuance of equity?

a) 52.38%

b) 49.47%

c) 47.35%

d) 41.59%

e) 38.51%

f) 34.50%

2) If the issuing price is $15 per share, what is the maximum number of shares the issuing firm can retain in this issuace?

a) 12,212,000

b) 14,212,000

c) 16,275,500

d) 17,025,000

e) 18,160,000

f) 19,025,000