Question 5.(15 points)The current market value of Calenda Corporation's equity is $120 million.The company has 10 million outstanding shares and will issue 5 million new shares.The investment banker charges a 7% spread.

a.What is the correctly valued offer price? b.How much cash will the company raise net of the spread? cWhat percentage of the company will new stockholders own?

d.What are 3 reasons that explain why a firm wants to raise new equity capital?

e.What are 3 reasons that explain why a firm would want to raise new capital through debt rather than equity?