Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zangs current value of equity is $60 million. Zang currently has 4 million shares outstanding and will issue 1 million new shares. ESMcharges a 7% spread. What is the correctly valued offer price? Note that we already know the value of the firm pre-issue! We need to figure out what the price will be after the new shares are issued. This dilutes existing shareholders since there are now more shares outstanding. How much cash will Zang raise net of the spread? The spread is what you pay the bank to issue the shares.