1. Milano Industries needs to raise $168,210,000 in an equity offering. Milano’s current stock price is $80. The underwriter says the issue must be underpriced by 5.0%. The underwriters require a spread of $9.25/share. How many shares must the company sell?

a. 3,000,000.

b. 2,520,000.

c. 1,682,100.

d. 1,500,000.

2. Boss Srores, Inc. had equity of $451.20 million at the beginning of the year. At the end of the year, the company had total assets of $211.03. During the year, the company sold no new equity. Net income for the year was $12.23 million and dividends were $0.69 million. What is Boss's sustainable growth rate?

a. 5.47 percent.

b. 2.56 percent.

c. 2.71 percent.

d. 5.58 percent.

e. 5.64 percent.

3. What does the credit term “5/15 net 45” (5 percent/15 net 45 days) mean?

a. Clients can opt to either receive a 5 percent discount for payment to a vendor within 5 days, a 15 percent discount within 15 days or pay the full amount in 45 days.

b. Clients can opt to either receive a 5 percent discount for payment to a vendor within 15 days or pay the full amount in 45 days.

c. Clients can opt to either receive a 15 percent discount for payment to a vendor within 5 days or pay the full amount in 45 days.

d. Clients can opt to either receive a 10 percent discount for payment to a vendor within 15 days or pay the full amount in 45 days.

4. Carbon8 Corporation wants to raise $164,150,000 in a seasoned equity offering, net of all fees. Carbon8 stock currently sells for $40.00 per share. The underwriters will require a fee of $4.50 per share, and indicate that the issue must be underpriced by 5.0%. How many shares must Carbon8 sell in order to raise the desired amount of capital?

a. 4.3 million.

b. 4.5 million.

c. 4.6 million.

d. 4.9 million.