Company XYZ has 10 million shares of common stock outstanding. It issued 3 million shares of Preferred Stock at a price of $6.00 per share in its latest round of financing (Series A). The recently issued 3 million shares of Preferred Stock are protected with a weighted-average anti-dilution provision. Now the firm issues 6 million shares of Series B Preferred stock at a price of $3 per share. a) What will be the ownership structure of the firm after the conclusion of the Series B round (on a fully-diluted as-converted basis)? b) Who factually pays for Series A’s anti-dilution provision?
Q: Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a…
A: Introduction:- The following basic information as follows under:- Salary for Xavier : $38,000…
Q: Explain the circumstances when an auditor needs to assess the components of the audit risk model…
A:
Q: Teri, Doug, and Brian are partners with capital balances of $30,500, $28,500, and $59,200,…
A: A partnership is a type of business that permits two or more people to co-own a firm and agree to…
Q: Assume Baxter Manufacturing begins January with 11 units of inventory that cost $12 each. During…
A: Introduction:- The following inventory methods used for inventory valuation as follows under:--…
Q: Entries for Issuing No-Par Stock On February 12, Quality Carpet Inc., a carpet wholesaler, issued…
A: To prepare journal entries first we need to understand the Golden Rules of Accounting and the types…
Q: 1. One of the functions of accounting is to "supply information for decision making". Explain this…
A: Accounting is referred to the process which involves recording business events and transactions in…
Q: A client that recently loosened its credit-granting policies uses percentages of aging categories as…
A: Lets understand the basics. Management prepares allowance for doubtful debt account in order to…
Q: Discuss the main challenges in recognising and measuring intangible assets, such as brands, in an…
A: Intangible assets are those assets that lacks physical substance, for example - brand name,…
Q: At the end of the year, Accounts Receivable has a balance of $5,345,000; Allowance for Doubtful…
A: Bad Debt is an amount which cannot be recoverable from a Debtor. The accounting treatment for bad…
Q: Auditors performing audits under the Single Audit Act issue an opinion on whether the Schedule of…
A: The term "auditing" normally refers to an objective review and evaluation of a company's financial…
Q: 2.77) Which can be cons corporate tax ?-sales commissions property rate equipment depreciati
A: Product cost of manufacturing means the costs incurred to manufacture a product i.e., costs incurred…
Q: Harris Company manufactures and sells a single product. A partially completed schedule of the…
A: Fixed costs are those costs which will not change with change in activity level. Variable costs on…
Q: The functions of and documents generated by which of the below departments determine when a…
A: The documents which complete sale criteria will only make able to record sale transaction. Sale can…
Q: While an engineering manager may prefer to use CFAT estimates to evaluate the AW of a project, a…
A: EVA, which stands for economic value added, seems to be a term based on the notion that a…
Q: Using financial statement ratios to analyze Coca-Cola and PepsiCo (Learning Objectives 1, 2, 3, & 4)…
A: Financial ratios refers to those ratios which states the line items of the financial statements into…
Q: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton…
A: The lease is an agreement in which one person provides the right to use the asset and in exchange…
Q: Indicate whether each decision is most likely to be made using managerial accounting information or…
A: Managerial accounting is that the observe of distinctive, measuring, analyzing, decoding, and act…
Q: a. Calculate the depreciation expense for year 1 b. Calculate the…
A: Depreciation :— Depreciation means Gradual Decrease in the Value of Assets due to Normal Wear and…
Q: Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book…
A: Partnership characteristics includes: Sharing of profits and losses Mutual agency Unlimited…
Q: Please fill in the missing figures(also show the step by step computation if possible) and prepare…
A: Different departments are assigned for various activities in the company. The cost of one department…
Q: 5. Prepare a Statement of Financial Position using the ff. accounts (one in account form and one in…
A: Financial Statements of The Company :— Financial statement of the Company Provide the Financial…
Q: What is the relationship between the internal control system and risk management with corporate…
A: The system of direction and control used by corporations is known as corporate governance. The…
Q: List the four major categories of general controls, and Identify the objectives of each.
A: General controls refer to the information system activities to be applied in the whole…
Q: No Plagiarism Please! 21. Complete the following transactions and explain how they would appear in…
A: Since you have posted multiple questions, we will solve the first one for you. if you want any…
Q: Boston Company sells baked bean making machines and guarantees them for three years.…
A: As per conservatism principle of accounting, all estimated losses in the business should be recorded…
Q: I need all blanks with blue arrows filled please and thank you.
A: Since, this is the follow-up question and you have asked the requirement of your question which is…
Q: 2.1 2.2 Calculate the VAT amount that is payable to SARS on the 31 July 2022. During August, the…
A: Given in the question: VAT Payable as on July 1, 2022 R 31,470 VAT Rate 15%…
Q: Jake, your staff auditor, will be performing the test of interbank transfers. He plans to compare…
A: Through inter bank transfers, money can be electronically sent from a sender's account at one bank…
Q: Sejz Company used perpetual inventory system to record inventory transactions for 2021. P1,900,000…
A: Inventory is one of the important current asset of the business. It includes inventory of raw…
Q: Identify whether each of the following events in this scenario occurs in the factor market or the…
A: Given in the question: Frances earns $825 per week because Frances is working as a programmer for PC…
Q: The top picture was helpful for the separately stated items
A: Working note :- Working of ordinary business income…
Q: PROMPT: Restful Sleep Mattress company is planning to expand into selling bedroom furniture. This…
A: Business expansion refers to the process whereby an organization will open a new branch or add a new…
Q: Nielson Corporation has three employees. Each employee is paid overtime at time and one-half…
A: Payroll Register A payroll register is a tool used to keep track of each employee's wage information…
Q: Statement of Cost of Goods Manufactured for a Manufacturing Company Cost data for Johnstone…
A: Introduction: The cost of goods manufactured is the sum of all manufacturing costs for goods…
Q: Dash (Pty) Ltd provided the following information that was extracted from the financial records for…
A: The cash flow statement shows the cash inflow and cash outflow which include the cash flow from…
Q: On October 1, 2021, Santana Rey launched a computer services company, Business Solutions, that is…
A: The worksheet based on the basic accounting equation i.e., assets are equal to sum of liabilities…
Q: There are four main methods of investment appraisal: Accounting Rate of Return, Payback, Net Present…
A: Capital Budgeting is the process to evaluate the potential of the project or Investment. Investment…
Q: Section B Question One Rukus trading company extracted the following balances from its books on 31…
A: Statement of profit and loss is one of the financial statement which is prepared for review of…
Q: 21. For share appreciation rights, S1. the liability is remeasured at the end of each reporting…
A: Equity Capital - Share capital and equity finance are other names for equity capital. It is referred…
Q: You want to invest $100 in a project whose cash flows have a duration of 4 years. You invest $10 of…
A: Bonds - Companies issue long-term debt as a formalized commitment to pay back the principle amount…
Q: Breifly outline the tax consequences of each of these four matters for the year end of 31 decemeber…
A: You have asked four matters which are the four sub-parts of the question kindly resubmit the…
Q: Rocky Volcano Chocolate operates two stores, one in Edmonton and another in St. John’s. The…
A: The break-even point is the point at which total cost and total revenue are equal, it mean there is…
Q: During the year the owner introduced further capital of £8,000 and withdrew £12,000 for her own use.…
A: The capital of owners get affected with additional investment, Withdrawals and net income or loss…
Q: Bramble, Finland's second largest homebuilder, has approached Wilson with an offer to buy 75,000…
A: Contribution Margin analysis :— Contribution margin analysis investigates the residual margin after…
Q: Preparing Accounting Adjustments Pownall Photomake Company, a commercial photography studio,…
A: Balance Sheet: It shows the financial position of the company at the end of a particular period. It…
Q: If the perpetual inventory record is kept in dollars, and costs are computed at the time of each…
A: Inventory valuation is based on the flow-off issue used by the organization. It can be the first in…
Q: On June 1 of the current year, Chris Bates established a business to manage rental property. The…
A: An accounting equation refers to a mathematical representation of the transactions. It indicates…
Q: Corporation manufactures three products from a joint process. The three products are in industrial…
A: Joint products are 2 or more different products that are simultaneously produced from a common…
Q: Discuss the effect of absorption and marginal costing on inventory valuation and profit…
A: Absorption costing also written as full costing. Under this method, all costs are considered in…
Q: [Determination of Selling Price] Question 18: The following data are obtained from the records of a…
A: Hi student, Since there are multiple subparts, we will answer only first three subparts. If you want…
Company XYZ has 10 million shares of common stock outstanding. It issued 3 million shares of Preferred Stock at a price of $6.00 per share in its latest round of financing (Series A). The recently issued 3 million shares of Preferred Stock are protected with a weighted-average anti-dilution provision. Now the firm issues 6 million shares of Series B Preferred stock at a price of $3 per share.
a) What will be the ownership structure of the firm after the conclusion of the Series B round (on a fully-diluted as-converted basis)?
b) Who factually pays for Series A’s anti-dilution provision?
Step by step
Solved in 2 steps
- Bonanza Billiard Games is an all-equity firm with 50 million shares outstanding, which are currently trading at $22 per share. Last month, Bonanza announced that it will change its capital structure by issuing $300 million in debt. The $200 million raised by this issue, plus another $200 million in cash that Bonanza already has, will be used to repurchase existing shares of stock. Assume that capital markets are perfect.• What is the market capitalization of the company before the transaction takes place?• What is the market capitalization of the company after the transaction takes place?Bernard Corporation wants to obtain P4 million in its first public issue of common stock. After the issuance, the total market value of a stock is estimated at $10 million. At present, there are 120,000 closely-held shares. REQUIREMENTS: (a) What is the amount of new shares that must be issued to obtain the P4 million? (b) After the stock issuance, what will be the expected price per share?ABC Co. is authorized to issue 1,000,000 ordinary shares with a $5 par value and 100,000, 6% preference shares with a $20 par value. The company is considering financing a large expansion project that is expected to bring sustainable growth to the company. The company’s investment banker has suggested that the company takes advantage of both equity and debt financing. He proposed that the company sells securities to investors called HYBRID. Each unit of HYBRID consists of: (1) a $1,000 face value, 10% stated rate, 5-years bond, which pays interest annually, and (2) 20 ordinary shares. On January 1, 2017, the company issued 500 units of HYBRID for a price of $1,200 per unit. The company paid 50 units of HYBRID to the Investment banker as underwriting fees. Assume that the effective market rate was 12% and that ordinary shares have an appraisal value of $15 per share. Required: For ABC Co.: Prepare the necessary journal entry(ies) to record the issue of HYBRID units on January 1, 2017.
- Nemesis, Incorporated, has 136,000 shares of stock outstanding. Each share is worth $110, so the company's market value of equity is $14,960,000. Suppose the firm issues 17,000 new shares at the price of $110, what will the effect be of this offering price on the existing price per share? Suppose the firm issues 17,000 new shares at the price of $99, what will the effect be of this offering price on the existing price per share? Suppose the firm issues 17,000 new shares at the price of $82, what will the effect be of this offering price on the existing price per share?Executive Cheese has issued debt with a market value of $100 million and has outstanding 15 million shares with a market price of $10 a share. It now announces that it intends to issue a further $60 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extra risk, mark the value of the existing debt down to $70 million.a. How is the market price of the stock affected by the announcement?b. How many shares can the company buy back with the $60 million of new debt that it issues?c. What is the market value of the firm (equity plus debt) after the change in capital structure?d. What is the debt ratio after the change in structure?e. Who (if anyone) gains or loses?ABC Co. is authorized to issue 1,000,000 ordinary shares with a $5 par value and 100,000, 6% preference shares with a $20 par value. The company is considering financing a large expansion project that is expected to bring sustainable growth to the company. The company's investment banker has suggested that the company takes advantage of both equity and debt financing. He proposed that the company sells securities to investors called HYBRID. Each unit of HYBRID consists of: (1) a $1,000 face value, 10% stated rate, 5-years bond, which pays interest annually, and (2) 20 ordinary shares. On January 1, 2017, the company issued 500 units of HYBRID for a price of $1,200 per unit. The company paid 50 units of HYBRID to the Investment banker as underwriting fees. Assume that the effective market rate was 12% and that ordinary shares have an appraisal value of $15 per share. Required: For ABC Co.: Prepare the necessary journal entry(ies) to record the issue of HYBRID units on January 1, 2017.…
- Simone's Sweets is an all-equity firm that has 9,100 shares of stock outstanding at a market price of $27 per share. The firm's management has decided to issue $88,000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT?Yana Corporation is considering expanding. It plans to finance the expansion by issuing P4 million in preferred stock. The preferred stock has a par value of P50 and a dividend rate of 12 percent. Similar issues of preferred stock are presently yielding 14 percent. QUESTIONS: (a) How much will the company receive for each share? (b) How many shares must be issued?The Greenbriar is an all-equity firm with a total market value of $584,000 and 22,800 shares of stock outstanding. Management is considering issuing $197,000 of debt at an interest rate of 10 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?
- The Palantir is an all-equity firm with a total market value of $536,000 and 21,200 shares of stock outstanding. Management is considering issuing $133,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?Cliff Corp. (CC) has an enterprise value (MV equity + debt – cash) of $330 million, $50 million in cash and $30 million in debt. CC has 10 million shares outstanding and is considering using its $50 million in cash to repurchase shares. What s CC’s share price prior to the prior to the repurchase? How many shares will CC repurchase? Suppose news is released that increases enterprise value to $350 million immediately after the repurchase, then what is CC’s new share price? If management knows about the news prior to the repurchase, should they repurchase before or after the news is released?Executive Cheese has issued debt with a market value of $100.56 million and has outstanding 15.60 million shares with a market price of $10 a share. It now announces that it intends to issue a further $55.44 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extra risk, mark the value of the existing debt down to $60 million. c-1. What is the market value of the firm (equity plus debt) after the change in capital structure? (Do not round intermediate calculations. Enter your answer in millions. Round your answer to 2 decimal places.) d. What is the debt ratio after the change in structure? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Who (if anyone) gains or loses?