What will be the required offer price

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Q1. Company XYZ needs to raise $100 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the number of shares sold is 2 million and the company's underwriters charge an 8% spread, what will be the required offer price?

Q2. In the previous problem, if the OSC filing fee is $500,000 and associated administrative expenses of the offering are $800,000, what will be the required offer price?

Q3. As the financial manager of firm Air, you are analyzing the capital structure of the firm. You find that EBIT is $12 million and unlevered cost of capital is 10%. The market value of debt is $50 million and cost of debt is 6%. What is the value of equity? What is the WACC? Assuming a tax rate of 30%.

Reference no: EM133148751

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