Hargrave Kitchen & Bath has 6 million shares outstanding at a price of $33.25 per share. The company has decided toraise capital through a rights issue. All shareholders will be issued one right per share. For every five rights held bythe stockholder, they can buy one share at a price of $33.25. How much money will this raise, if all shareholdersexercise their rights? Round to one decimal place.A. $30.0 millionB. $33.3 millionC. $39.9 millionD. $234.4 millionE. $199.5 million

Right Shares shares issued to existing shareholders in proportion to their current holdings at a…

Answered: Hargrave Kitchen & Bath has 6 million…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Farah’s Fine Fashions (FFF) is considering raising money through a rights offering. FFF currently has 10 million shares outstanding selling for $22 per share. Current shareholders will receive one right per share. Four rights are required to buy one share for $20. Will the rights be exercised and if so, how much money will FFF raise if all rights are exercised? Select one: a. The rights will not be exercised. b. $4 million c. $40 million d. $50 million e. None of the above.
A firm wants to raise $40 million through a rights offering. The subscription price is set at $40. Currently, the company has 3 million shares outstanding with a current market price of $50 a share. Each shareholder will receive one right for each share of stock they currently own. How many rights will be needed to purchase one new share of stock in this offering? 4 6.
1.) You purchase 600 shares of XYZ Corporation at $30 per share using an initial margin of 70%. The stock is now selling for $41 per share and you want to use the excess equity in your account to pyramid. You want to purchase 400 shares of JT Corporation at $122 per share. If the minimum initial margin is 60%, what is the minimum amount of equity that you will have to put up in this transaction? 2. You purchase 500 shares of Johns Incorporated at $50 per share using an initial margin of 60%. Your maintenance margin is 25% and the minimum initial margin is 50%. A. How low can the stock price fall before you receive a margin call? B. If the stock price falls to $21 a share, how much additional equity must you add to your account?
Farah’s Fine Fashions (FFF) is considering raising money through a rights offering. FFF currently has 10 million shares outstanding selling for $22 per share. Current shareholders will receive one right per share. Five rights are required to buy one share for $20. Will the rights be exercised and if so, what is FFF’s new market value if all rights are exercised? Select one: a. The rights will not be exercised. b. $220 million c. $260 million d. $321 million e. None of the above.
Atlas Inc. currently has 20 million shares outstanding. The current stock price is $35/share. The company has decided to do a rights issue. Every existing shareholder will be given 1 right for each share that they own. It will take 4 rights to buy one new share at a price of $25 per share. How much money will the company raise if all of the rights are exercised? Question 9 options: A) $700,000,000 B) $450,000,000 C) $500,000,000 D) $125,000,000 E) $105,000,000
Yonkers Inc. is issuing new common shares in a rights offer to raise $10 million for a new project. The subscription price for each new share is $20. The firm currently has two million common shares outstanding, each priced at $25 in the market. What is the price of each right? Select one: a. $1 b. $2 c. $5 d. $10 e. $15
2. You purchase 600 shares of Jenkins Corporation at $30 per share using an initial margin of 70%. The stock is now selling for $41 per share and you want to use the excess equity in your account to pyramid. You want to purchase 400 shares of Watson Corporation at $122 per share. If the minimum initial margin is 60%, what is the minimum amount of equity that you will have to put up in this transaction?
Teasler Inc. currently trades at $40 and has 9 million shares outstanding with Net Income of $12 Million. The Board decides to use a rights offering to raise new capital. Each shareholder will receive one right for each share. Laila Sims currently owns 4,000 shares of Teasler stock. Four rights plus $34 cash are needed to buy one new share. The ex-rights date is in 30 days. a. What is the value of a right? b-1. How many of the new shares could Laila buy if she exercised all her rights? b-2. How much cash would this require? c. How many new shares is Teasler issuing and what are the proceeds? d. If the price of Teasler shares price moves to $30 what is the value of the right ( Assume still rights-on)
Suppose you own 1,000 common shares of Laurence Incorporated. The EPS is $12.00, the DPS is $5.00, and the stock sells for $75 per share. Laurence announces a 2-for-1 split. Immediately after the split, how many shares will you have? Round your answer to the nearest whole number. What will the adjusted EPS and DPS be? Round your answers to the nearest cent.
Answer the following problems with a complete solution. a. Find the 5% commission on the total sales of P20,000.00 b. You bought 20 shares at P750.00 per share. The broker charged her a P150.00 commission. Find the cost of the stock.c. You own 105 shares, par value P200.00. If the corporation declares an 8% dividend, what is the total dividend that should get? d. You bought ten P750.00 bonds at 315 plus a 6% brokerage fee. Find the investment.
Toady Inc. has 2 million shares outstanding selling at $70 a share. The Company intends to undertake a rights issue that allows 1 share to be purchased for every 5 shares currently held by shareholders for $40 each. If all shareholders take up their entitlement, which one of the following is true? The stock price will fall to $65. The number of shares outstanding will fall to 1.6 million. The firm will raise $13.33 million. The total value of the firm will equal $124 million.
Brown Mines needs $1.2 billion of new equity.Market price is $25.Brown Mines decides to raise addtional funds by offering the right to buy 4 new shares for 16 at $12 per share.WIth 100% subscription,what is value of each right? A.$10.4 B.8 C.16 D.9.6

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