Corp. needs to raise $50.5 million to fund a new project. TH al cash offer and the company's underwriters will charge a ced with the issue are $800,000. How many shares need t ultiple Choice O O 1,853,707 shares 1,935,484 shares 1,656,009 shares 1,771,930 shares
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- 13-6 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. $1512-6 Van Bran Inc. is looking into financing a $30 million project with an equity issue. If the firm’s underwriter charges a spread (i.e., underwriting fee) of 6% on equity issues, what is the gross amount that must be raised in Van Bran’s equity issue? Select one: a. $31,914,894 b. $32,000,000 c. $33,264,980 d. $33,684,210 e. $34,042,553A5 3e QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes to finance this project by issuing new shares with a rights offering. Currently, the company has 2,000,000 shares outstanding, each valued in the financial market at $30. With the rights offering, shareholders will be able to purchase one new share for a subscription price of $10. e. What is the ex-rights price for each share, Me?
- A5 3c QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes to finance this project by issuing new shares with a rights offering. Currently, the company has 2,000,000 shares outstanding, each valued in the financial market at $30. With the rights offering, shareholders will be able to purchase one new share for a subscription price of $10. c. How many rights will be required to buy one new share, N?TB MC Qu. 18-28 Joshua Industries is considering a new... Joshua Industries is considering a new project with revenue of $478,000 for the indefinite future. Cash costs are 68 percent of the revenue. The initial cost of the investment is $685,000. The tax rate is 21 percent and the unlevered cost of equity is 14.2 percent. The firm is financing $200,000 of the project cost with debt. What is the adjusted present value of the project? Multiple Choice O O O $207,975 $232,408 $202,429 $225,941 $198,311Present Tense Tonic wants to raise $13 million to purchase equipment by issuing new securities. Management estimates the issue will cost the firm $875,500 for accounting, legal, and other costs. The underwriting spread is 6.5 percent and the issue price is $24 per share. How many shares of stock must be sold if the firm is to have sufficient funds remaining after costs to purchase all of the desired equipment? 19 01:15:32 Multiple Choice 608,010 shares 521,121 shares 618,338 shares 647,666 shares 582,139 shares
- 13-8 Abacus Corporation needs to raise $20 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 $48 per share and the company’s underwriter charges an 8% spread, how many shares need to be sold? Select one: a. 452,899 b. 571,429 c. 617,143 d. 621,118 e. 675,128A5 3f QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes to finance this project by issuing new shares with a rights offering. Currently, the company has 2,000,000 shares outstanding, each valued in the financial market at $30. With the rights offering, shareholders will be able to purchase one new share for a subscription price of $10. f. What is the value of a right after the ex-rights date, Re?三= Chapter 17, Comprehensive Problem, Jets Corporation Jet Corporation currently has 120,000 shares outstanding that are selling at $55 per share. It needs to raise $800,000. Net income after taxes is $400,000. Its vice president of finance and its investment banker have decided on a rights offering, but are not sure how much to discount the subscription price from the current market value. Discounts of 12 percent, 22 percent, and 42 percent have been suggested. Common stock is the sole means of financing for the Jets Согрoration. a. For each discount, determine the subscription price, the number of shares to be issued, and the number of rights required to purchase one share. (Round to one place after the decimal point where necessary.) b. Determine the value of one right under each of the plans. (Round to two places after the decimal point.) Compute the earnings per share before and immediately after the rights offering under a С. 10 percent discount from the market price. d. By what…
- 13-10 Zanders Inc. is issuing new shares in a rights offer to raise $10 million for a new project. The subscription price for each new share is $20. The company has two million outstanding common shares and a share price of $25. If the company’s investment dealer charges a 6% underwriting spread on the rights offer, what is the percentage flotation cost on the net proceeds? (Round your answer to two decimal places.) Select one: a. 5.26% b. 6.00% c. 6.38% d. 7.32% e. 7.68%A5 3d QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes to finance this project by issuing new shares with a rights offering. Currently, the company has 2,000,000 shares outstanding, each valued in the financial market at $30. With the rights offering, shareholders will be able to purchase one new share for a subscription price of $10. d. What is the value of a right before the ex-rights date, R0?13.15 Calculating Flotation Costs Southern Alliance Company needs to raise $75 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Flotation costs for issuing new common stock are 7 percent; for new preferred stock, 4 percent; and for new debt, 3 percent. What is the true initial cost figure the company should use when evaluating its project?
