Answer the following question:

Part A:

Crane Corp. needs $750,000 for a new project that will increase net earnings by $150,000 per year. The issue price for the new shares for the new project will be $16.25/share. In addition to the $750,000 needed for the project, the firm will incur $60,000 in expenses associated with the issue and 6.3% underwriters fee. How many shares must Crane Corp issue in order to receive $750,000 in net proceeds? Please round your answer to the nearest integer (i.e., zero decimal places).

Part B:

The risk in a firm commitment IPO rests with the firm that is trying to go public.

a) True

b) False