A company is planning an IPO. Its underwriters have said thestock will sell at $50 per share. The underwriters will charge a 7%spread. How many shares must the company sell to net $93 million,ignoring any other expenses? (2 million)
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A company is planning an IPO. Its underwriters have said the
stock will sell at $50 per share. The underwriters will charge a 7%
spread. How many shares must the company sell to net $93 million,
ignoring any other expenses? (2 million)
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- A firm desires to sell stock to the public. The underwriter charges $0.4 million in fees and offers to buy six million shares from the firm at a price of $30 per share. In addition, registration and audit fees total $120,000, and marketing and miscellaneous fees add up to another $65,000. The underwriter expects to earn gross proceeds per share of $36. a) What is the issuing firm's out-of-pocket dollar transaction cost to issue the stock? b) Immediately after the stock was issued, the stock price rose to $38. What is the issuing firm's opportunity cost? c) What is the total issuance cost, including opportunity costs, as a percentage of the total funds available to the issuing firm?The Very Big Corporation needs to net $10,000,000 from the sale of common stock. Its investment dealer has informed the firm that the reatil price will be $25 per share, and the firm will receive $22 per share. Out-of-pocket costs are $300,000. How many shares must be sold?David's Watersports Firm is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $16.85 per share for 550,000 shares. The company will receive $15.40 per share and will incur $180,000 in registration, accounting, and printing fees. A. What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value (at retail)? B. If the firm wanted to net $15.99 million from this issue, how many shares must be sold?
- 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.The Whistling Straits Corporation needs to raise $60 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $21 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold? (Do not round intermediate calculations and round your answer to nearest whole number, e.g., 1,234,567.) Number of shares offered 3,133,641The Elkmont Corporation needs to raise $67.9 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $23 per share and the company's underwriters charge a spread of 7.5 percent. How many shares need to be sold? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. Number of shares offered
- Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,000 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,000 worth of stock. Ignore taxes Assets Liabilities and Equity Cash $ 2,000 Debt $10,000 Fixed assets 28,000 Equity 20,000 What will be the subsequent price per share if the firm pays a dividend? What will be the subsequent price per share if the firm repurchases stock? If total earnings of the firm are $2,000 a year, find earnings per share if the firm pays a dividend. Now find earnings per share if the firm repurchases stock. Find the price-earnings ratio if the firm pays a dividend. Find the price-earnings ratio if the firm repurchases stock. Adherents of the “dividends-are-good” school sometimes point to the fact that stocks with high dividend payout ratios tend to sell at above-average price-earnings multiples. Is Big…Your company has earnings per share of $4.49. It has 1.621 million shares outstanding, each of which has a price of $45.00. You are thinking of buying TargetCo, which has earnings per share of $1.50, 1.335 million shares outstanding, and a price per share of $21.00. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will your earnings per share be after the merger? b. Suppose you offer an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 15% premium to buy TargetCo. What will your earnings per share be after the merger? c. What explains the change in earnings per share in part (a)? Are your shareholders any better or worse off? d. What will your price-earnings ratio be after the merger (if you pay no premium)? How does this compare to your P/E ratio before the merger? How does this compare 010Farah’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.
- The Meadows Corporation needs to raise $70 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $30 per share and the company’s underwriters charge a spread of 8 percent, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.)The Meadows Corporation needs to raise $52 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $45 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.) Number of shares offeredJust Right Incorporated is considering the option of an extra dividend versus a share repurchase and the impact of both decisions on the firm. Just Right plans to spend $85,000 in respect of both scenarios. Just Right’s current earnings are $2.10 per share, and the stock currently sells for $45 per share. Just Right currently has 5,000 shares outstanding.You own one share of stock in this company.If the company issues the dividend, what will your total investment be worth?
