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The Presley Corporation is about to go public. It currently has aftertax earnings of $7,000,000, and 2,000,000 shares are own

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Answer #1

a. Net proceeds = {[Public price × (1 – Spread)] × Number of new shares} – Costs

Net proceeds = {[$25 × (1 – 0.04)] × 500,000} – $250,000

Net proceeds = $11,750,000

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