You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $10.9 million face value of 10-year debt. You have the following data for each: A public issue: The interest rate on the debt would be 8.95%, and the debt would be issued at face value. The underwriting spread would be 1.59%, and other expenses would be $89,000. A private placement: The interest rate on the private placement would be 9.9%, but the total issuing expenses would be only $39,000. Is it possible to get these calculations in Excel 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.
You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $10.9 million face value of 10-year debt. You have the following data for each: A public issue: The interest rate on the debt would be 8.95%, and the debt would be issued at face value. The underwriting spread would be 1.59%, and other expenses would be $89,000. A private placement: The interest rate on the private placement would be 9.9%, but the total issuing expenses would be only $39,000. Is it possible to get these calculations in Excel 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You need to choose between making a public offering and arranging a private placement. In each case, the issue involves $10.9 million face value of 10-year debt. You have the following data for each:
- A public issue: The interest rate on the debt would be 8.95%, and the debt would be issued at face value. The underwriting spread would be 1.59%, and other expenses would be $89,000.
- A private placement: The interest rate on the private placement would be 9.9%, but the total issuing expenses would be only $39,000.
Is it possible to get these calculations in Excel
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.
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