Calculating Costs of Issuing Stock Your company needs to raise $4.15 million to finance plant expansion. In discussions with its investment bank, you learn that the bankers recommend a gross price of $50.75 per share and that 105,000 shares of stock be sold. If the net proceeds on the stock sale leaves your company with $4.15 million, what is the underwriter's spread per share on the stock issue. Multiple Choice $11.23 $28.29 $39.52 $5.62

Calculating Costs of lssuing Stock Your compary needs to raise $4.15 mition to finance plant expansion in discussions wath its investment bank, you learn that the bankers recommend a gross price of $5075 per share and that 105.000 shares of stock be sold. if the net proceeds on the stock sale leaves your company with $4.15 million, what is the underwriter's spread per share on the stock issue. Multiple Cnoice 5123 $2829 $39.52 5562 Your company has a 21% tax rate and has $769 milion in assets, currently financed entirely with equity, Equity is worth $5190 per shate, and book value of equity is equal to market value of equity. Also, let's assume that the firm's expected values for EBiT depend upon which state of the economy occurs this year, with the possible values of EBIT and their associated probabilties as shown below: The firm is considering switching to a 25 percent debt capital structure, and has determined that they would have to pay a 8 percent yleid on perpetual debt in either event. What will be thestandard deviation in EPS if they switch to the proposed capital structure? Note: Round your intermediate calculations and final answer to 2 decimal places except calculation of number of shares which should be rounded to nearest whole number. Multiple Choice 231 1234 13.50 6.09