Young Corporation stock currently sells for $20 per share. There are 1 milion shares currently outstanding. The company announces plans to raise $4 milion by offering shares to the public at a price of $20 per share. o. If the underwriting spread is 8%, how many shares will the company need to issue in order to be left with net proceeds (before other administrative costs) of $4 million ? (Do not round Intermediate calculations. Round your answer to the nearest whole number.) Number of shares cet b. If the under writing spread is 89% and the other administrative costs are $45.000, what is the dollar value of the total direct costs of the issue? (Enter your answer in dollars not in millions. Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.) Total direct costs b. If the under writing spread is 8% and the other administrative costs are $45,000, what is the dollar value of the total direct costs of the issue? (Enter your answer in dollars not in millons. Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.) Total direct costs c. If the share pnce fails by 4% at the announcement of the plans to proceed with a seasoned offering what is the collar cost of the announcement effect? (Enter your answer in dollars not in millons) Cost of the announcement offect You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $91 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 8.05%, and the debt would be issued at face value. The underwriting spread would be 169%, and other expenses would be 971000 A private placement The Interest rate on the private placement would be 8.5%, but the total issuing expenses would be only $21,000 Required: 0-1. Calculate the net proceeds from public issue 3-2. Calculate the net proceeds from private placement. b-1. Calculate the PV of the extra interest on the private placement b-2. Other things being equal, which is the better deal? Complete this question by entering your answers in the tobs below. Regal and a2 Reqbi and b2 Calculate the net proceeds from public issue and private placement. Do not round intermediate calculations. Enter your answers in dollars not millions A public issue The Interest rate on the debt would be 8.05%, and the debt would be issued at face value. The underwriting spread would be 169%, and other expenses would be $71,000. A private placement The interest rate on the private placement would be 8.5%, but the total issuing expenses would be only $21,000. Required: 8-1. Calculate the net proceeds from public issue. 0-2. Calculate the net proceeds from private placement. b-1. Calculate the PV of the extra interest on the private placement. b-2. Other things being equal, which is the better deal? Complete this question by entering your answers in the tabs below. Req al and a2 Req bi and b2 Calculate the net proceeds from public issue and private placement. (Do not round intermediate calculations. Enter your answers in dollars not millions.) Net Proceeds a-1. From public issue a-2. From private placement Renb1 and 2 >
