You need to choose between making a public offering and

arranging a private placement. In each case, the issue involves

$$10\mathrm{.}6$ million face value of $10-$year debt. You have the following

data for each:a$-1.$Calculate the net proceeds from

public issue.$($Enter your answer in dollars not

millions of dollars.$)$a$-2.$Calculate the net proceeds from

private placement.$($Enter your answer in dollars not

millions of dollars.$)$b$-1.$Calculate the Present Value of the

extra interest on the private placement.$($Do not round

intermediate calculations. Enter your answer in dollars not

millions of dollars. Round your answer to the nearest whole dollar

amount.$)$b$-2.$Other things being equal, which is

the better deal?$$

You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $$11$ million face value of $10-$year debt. You have the following data for each:

A public issue: The interest rate on the debt would be $9\%,$ and the debt would be issued at face value. The underwriting spread would be $1\mathrm{.}6\%,$ and other expenses would be $$90,000.$

A private placement. The interest rate on the private placement would be $10\%,$ but the total issuing expenses would be only $$40,000.$

Q$-1.$ Calculate the net proceeds from public issue. $($Enter your answer in dollars not millions of dollars.$)$

a$-2.$ Calculate the net proceeds from private placement. $($Enter your answer in dollars not millions of dollars.$)$

b$-1.$ Calculate the Present Value of the extra interest on the private placement. $($Do not round intermediate calculations. Enter your answer in dollars not millions of dollars. Round your answer to the nearest whole dollar amount.$)$

b$-2.$ Other things being equal, which is the better deal?

Answer is complete but not entirely correct.

$\backslash$table$[[1,$Net proceeds of public issue,$$10,348,640$