Dode Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Dode and ESM agree that Zangs current value of equity is $80 million. Dode currently has 5 million shares outstanding, which will continue to be held by family members. Dode would like to bring in a net proceed of $20 million from the IPO. ESM charges a 7% spread.

1. How many shares will be issued to new investors through IPO?
   1. 1.25 million
   2. 1.3702 million
   3. 1.4809 million
   4. 1.5326 million
2. What is the estimated offer price per share?
   1. $15.10
   2. `$15.70
   3. $16.00
   4. $16.90