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%