Question

# A loan commitment of \$4.37 million with an up-front fee of 60 basis points and a back-end fee of 25 basis points.

The take-down on the loan is 40 percent.

What is the total fees you will pay on this loan commitment.

Problem 18-06 Calculating Costs of Issuing Debt (LG18-4)

Harper’s Dog Pens, Inc. with the help of its investment bank, recently issued \$192.6 million of new debt. The offer price on the debt was \$1,000 per bond and the underwriter’s spread was 6 percent of the gross proceeds.

What is the amount of capital funding Harper’s Dog Pens raised through this bond issue.

Problem 18-03 Calculating Costs of Issuing Stock (LG18-4)

Husker’s Tuxedo’s, Inc. needs to raise \$256 million to finance its plan for nationwide expansion. In discussions with its investment bank, Husker’s learns that the bankers recommend an offer price (or gross price) of \$40 per share and they will charge an underwriter’s spread of \$2.05 per share.

What is the net proceeds per share to Husker’s from the sale of stock. (Round your answer to 2 decimal places.)

How many shares of stock will Husker’s need to sell in order to receive the \$256 million needed?

Problem 17-4 Total Dividend Amount (LG17-2)

Suppose a firm has a retention ratio of 65 percent and net income of \$9.9 million. How much does it pay out in dividends? (Enter your answer in dollars not in millions.)

Problem 17-2 Payout Ratio (LG17-2)

Suppose a firm pays total dividends of \$686,000 out of net income of \$4.9 million. What would the firm’s payout ratio be? (Round your answer to 2 decimal places.)