LiveBetter Can Choose Between the Two Following Issues

question 58

Essay

LiveBetter can choose between the two following issues:
a. A public issue of $10 million face value of 10-year debt. 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.
b. A private placement of $10 million face value of 10-year debt. The interest rate on the debt would be 9% and the total issuing expenses would be $30,000.
Which deal should LiveBetter choose?

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Definitions:

Drug Therapy

The treatment of diseases or symptoms with pharmaceutical drugs, as prescribed by a healthcare provider.

Suicidal

Pertaining to having thoughts, intentions, or actions geared towards ending one's own life.

Placebo Effect

A phenomenon in which a person experiences a physiological or psychological improvement after being given a treatment with no therapeutic effect, due to their belief in the treatment's efficacy.

Breathing Exercise

Practices or techniques focused on controlling the breath, used for relaxation, stress management, or improving respiratory health.