Young Corporation stock currently sells for $20 per share. There are 1 million shares currently outstanding. The company announces plans to raise $4 million by offering shares to the public at a price of $20 per share.

a. 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 ?

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?...