Please help me answer question 3.

You need to choose between making a public offering and arranging a private placement. In each case the issue involves $10 million face value of 10-year debt. You have the following data for each: A public issue: The interest rate on the debt would be 8.5%, and the debt would be issued at face value. The underwriting spread would be 1.5%, and other expenses would be $80,000. A private placement: The interest rate on the private placement would be 9%, but the total issuing expenses would be only $30,000. 1. Calculate the net proceeds from public issue. (9,770,000] 2. Calculate the net proceeds from private placement. [9,970,000] 3. Calculate the PV of extra interest on private placement. 4. Other things being equal, which is the better deal