The company Sony is debt free and has an EBIT of $13 mil per year. It has 6 million shares outstanding and cost of equity is 8%. Corporate tax rate is 28%. 1.What is the current share price? 2. The company is deciding whether to do a Seasoned equity offering (SEO) that must net $17 million after all costs and fees. Underwriting fees are 5% of gross proceeds and legal fees amount to 1.3 million. Shares are offered to public at a rate of discount 7%. How many shares will the firm have to place during SEO?

3.What is post seo share price assuming cost of capital stays the same?

4.After SEo the firm will invest the net proceeds into new projects. IT expects to acheive constant return on the new investment. Cost of equity of firm will not be affected. What pre tax return on new investment is required to bring the share price back to the original value? (ignore depreciation and ongoing capital expenditures.)