risk premium market 5.5% amd tax rate 40%

8. You are the owner of a small and successful firm with an estimated market value of $50 million. You are considering going public. a. What are the considerations you would have in choosing an investment banker? b. You want to raise $20 million in new financing, which you plan to reinvest back in the firm. (The estimated market value of $50 million is based on the assumption that this $20 million is rein- vested.) What proportion of the firm would you have to sell in the initial public offering to raise $20 million? c. How would your answer to (b) change if the investment banker plans to underprice your offering by 10%? d. If you wanted your stock to trade in the $20-$25 range, how many shares would you ate? How many shares would you have to issue? have to cre