Question 2 Through IPO, an investment bank is helping a manufacturing fim to issue new equity to finance the firm's $120 million investment project that has a present value of $165 million. The firm has a debt of $45.1 million in place. The firm's average annual earnings has been $12.8 million and EBITDA $17 million. P/E and V/EBITDA ratios of similar fime without delt are 14 and 11.3, respectively. a) If the issuing firm wants to increase its old shareholders' wealth by a minimum of 20% with the issuance and investment, what is the maximum issuance costs (IC) the investment bank can charge? b) Given the calculated above, what is the fraction of ownership does the fim need to sell to the new investors? c) If the target share price after the issuance is $22.60, how many shares need to be sold to the new investors? Question 2 Through IPO, an investment bank is helping a manufacturing fim to issue new equity to finance the firm's $120 million investment project that has a present value of $165 million. The firm has a debt of $45.1 million in place. The firm's average annual earnings has been $12.8 million and EBITDA $17 million. P/E and V/EBITDA ratios of similar fime without delt are 14 and 11.3, respectively. a) If the issuing firm wants to increase its old shareholders' wealth by a minimum of 20% with the issuance and investment, what is the maximum issuance costs (IC) the investment bank can charge? b) Given the calculated above, what is the fraction of ownership does the fim need to sell to the new investors? c) If the target share price after the issuance is $22.60, how many shares need to be sold to the new investors