Pricing Stock Issues in an IPO

Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $62 million. Zang currently has 4 million shares outstanding and will issue 1.3 million new shares. ESM charges a 6% spread.

What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent.

$

How much cash will Zang raise net of the spread? Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Do not round intermediate calculations. Round your answer to three decimal places.

$ million

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