2. Anderson Whitney has earnings of $4.5 million on 2.2 million shares outstanding.It is planning a public offering of 500,000 shares of which 200,000 will be new corporate shares and 300,000 will be issued to the founder and CEO as a secondary offering.The net price of the offering will be $22 and the corporate proceeds are expected to produce $2 million in corporate earnings.Find (1) the corporation's earnings per share before the offering; (2) the corporation's expected earnings per share after the offering.

2. Xenox Incorporated is considering whether to raise $1 million of debt on a 20-year issue by public offering or private placement.If it raises the money in a public offering, it will have an interest rate of 4% and the underwriting spread will be 3.0%.It will also have to pay $30,000 in out-of-pocket costs.On the other hand, if Xenox raises the money via a private placement its interest rate will be 3% and it will incur $30,000 in out-of-pocket costs.Either way, the interest must be paid semiannually and the debt will remain outstanding the full 20 years at which time it will be paid.The current market rate of interest is 6% per annum.Ignore taxes.Find which plan offers the higher net present value?