1. RMP Ltd issues a $80 million IPO and the offering price to the public is $5 per share. It is already given that the underwriting cost (i.e., underwriter's spread) is $1.10 per share. The company's legal fees, ASIC registration fees, and other administrative costs are $270,000. The company's share price increases by 10 percent on the first day. What is the company's total cost of issuing the securities?

a - $13600000

b - $25870000

c - $19000000

d - $17100000

2. A company wishes to undertake a project that costs $200m. It currently has $10m in cash on hand and believes that it can raise $75m in debt and $150m in equity if needed. According to the pecking order theory of the capital structure, what percent of the project will be financed by debt?

a - 50%

b- 26.67%

c - 37.5%

d - 100%