Please help with B-1
You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $9.2 million face value of 10-year debt. You have the following data for each:
Required:
a-1. Calculate the net proceeds from public issue.
a-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?
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