Visio LLC produces a modern selection of face shields suitable for any pandemic. The company is debt-free and achieves an EBIT of$98.1 million per year. It has18.4 million shares outstanding and its cost of equity is9.0%.The corporate tax rate is33.0%.

Compute the current share price.$

To grow in size, the firm contemplates a seasoned equity offering (SEO) that must net85million after all costs and fees. Underwriting fees are7.0% of the gross proceeds and legal fees amount tomillion. In addition, to ensure sufficient demand, shares would need to be offered to the public at a a discount ofpercent.

Given these constraints, how many shares (in million) will the firm have to place during the SEO? million shares

What is the post-SEO share price assuming the cost of capital stays the same?

After the SEO, the firm will invest the net proceeds into a new line of products. It expects to achieve a constant return on new investmenton this part of the business every year. The overall cost of equity of the firm will not be affected.

What pre-tax return on new investment is required to bring the share price back to the original value? (We are ignoring depreciation and ongoing capital expenditures here)---%