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# 1.Suppose that a company's equity is currently selling for \$26.75

per share and that there are 5.90 million shares outstanding. If the firm also has 49 thousand bonds outstanding, which are selling at 110.50 percent of par, what are the firm's current capital structure weights for equity and debt respectively?

2.Video Games, Inc., with the help of its investment bank recently issued 10.10 million shares of new stock. The offer price on the stock was \$48.00 per share and Video's received a total of \$456,500,000 through this stock offering. Calculate the net proceeds and the underwriter's spread on the stock offering. What percentage of the gross price is the investment bank charging Video for underwriting the stock issue? (Round your intermediate calculations and final answer to 2 decimal places.)

3.Home Improvement, Inc. needs to raise \$3.00 million to finance plant expansion. In discussions with its investment bank, Home Improvement learns that the bankers recommend a debt issue with a gross proceeds of \$1,000 per bond and they will charge an underwriter's spread of 7 percent of the gross proceeds. How many bonds will Home Improvement need to sell in order to receive the \$3.00 million they need?

4.You have approached your local bank for a start-up loan commitment for \$1,600,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = \$1,600,000, term = 1 year, up-front fee = 20 basis points, back-end fee = 60 basis points. If you take down 85 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

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