On January 20, Metropolitan Inc., sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $40.25 per share. Of the 8 million shares sold, 5 million shares were primary shares being sold by the company, and the remaining 3 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.1% of the gross proceeds as an underwriting fee. a. How much money did Metropolitan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 3.4% on the announcement of the SEO and the new shares were sold at that price, how much money would Metropolitan receive?

On January 20, Metropolitan Inc., sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $40.25 per share. Of the 8 million shares sold, 5 million shares were primary shares being sold by the company, and the remaining 3 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.1% of the gross proceeds as an underwriting fee. a. How much money did Metropolitan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 3.4% on the announcement of the SEO and the new shares were sold at that price, how much money would Metropolitan receive?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

See similar textbooks

Similar questions

On January 20, Metropolitan Inc., sold 10 million shares of stock in an SEO. The market price of Metropolitan at the time was $42.25 per share. Of the 10 million shares sold, 5 million shares were primary shares being sold by the company, and the remaining 5 million shares were being sold by the venture capital investors. Assume the underwriter charges 4.6% of the gross proceeds as an underwriting fee. a. How much money did Metropolitan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 2.5% on the announcement of the SEO and the new shares were sold at that price, how much money would Metropolitan receive? a. How much money did Metropolitan raise? After underwriting fees, Metropolitan raised $ million. (Round to two decimal places.)
(44). Subject:- Accounting On March 1, Emma Corp purchased 1,900 (or 11%) of the common shares of Christine Corp for $40 per share. Brokerage fees of $1,100 were incurred on the purchase. On December 1, Christine Corp declared and paid $30,000 of dividends. On December 31, shares of Christine Corp were trading at $62 per share. The investment was recorded using FVTOCI. What amount would be recorded to the "Investment in Christine Corp" account on March 1?
AL - Kamel Supplies Company purchased 1200 shares of Bahwan Group shares at OR30 per share. Brokerage fee of OR700. Two months later, the shares were sold for OR32 per share. The brokerage fee on the sale was OR800. The journal entry for purchase is Investment in G Motors common shares ...... 36,700 36,700 Cash Select one 1. True 2. False
On January 20, Sullivan Inc., sold 10 million shares of stock in an SEO. The market price of Sullivan at the time was $40.25 per share. Of the 10 million shares sold, 4 million shares were primary shares being sold by the company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 4.5% of the gross proceeds as an underwriting fee. a. How much money did Sullivan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 2.7% on the announcement of the SEO and the new shares were sold at that price, how much money would Sullivan receive?
On May 1, Republic Corporation purchased 400 shares of stock for P114 per share and held it as FVTPL financial assets. The price decreased to P106 per share on August 1 and then increased to P122 on December 31. During the year, the company received dividends of P3.50 per share. At what amount should the investment be valued in the December 31 balance sheet?
ICOT Industries issued 15 million of its $1 par common shares for $424 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million. Required: 1. Prepare the journal entry to record the issuance of the shares. 2. Explain how recording the share issue costs differs from the way debt issue costs are recorded.
Vaughn Corporation sold 390 shares of treasury stock for $55 per share. The cost for the shares was $45. The entry to record the sale will include a O credit to Treasury Stock for $21450. O credit to Paid-in Capital from Treasury Stock for $3900. O debit to Paid-in Capital in Excess of Par for $3900. O credit to Gain on Sale of Treasury Stock for $17550.
[Accounting for Corporation] Karima Corporation issued 2, 000 shares for legal services with a fair value of USD500, 000 on March 22. On this date, the shares are trading at a market value of USD150 per share. How much should the legal services be valued? Please explain the answer.
1. ABC Co purchases 10,000 XYZ Inc., shares for P100 per share on April 9, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Requirement: Prepare Journal Entries on April 9 and April 30, 20x1. 2. ABC Co purchases 10,000 XYZ Inc. shares for P100 per share on April 27, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Prepare Journal Entries on April 9 and April 30, 20x1. Requirement: Prepare Journal Entries on April 27 and April 30, 20x1. 3. ABC Co holds 10,000 shares of XYZ Inc. as Investment in equity securities. On April 1, 20x1, ABC Co receives land with accost of P1,000,000 and fair value of P1,300,000 as property dividend. Requirement: Prepare Journal Entries on April1. 4.…
Chowking Company engaged in the following investment transactions during the current year: February 1 Purchased 5,000 ordinary shares of ZZZ Company for P200 per share plus a brokerage commission of P50,000. These shares are classified as trading securities. June 25 Received P120 per share dividend on ZZZ Company shares. October 1 Purchased 20,000 shares of XXX Company for P150 per share plus brokerage fee of P100,000. These shares are designated at FVOCI. December 31 Received P50 per share dividend on XXX Company shares. 31 ZZZ Company shares are selling for P250 and XXX shares are selling for P180. What net amount of income should be reported for the current year?
On June 8, Pharoah Ltd. was incorporated and issued 33,600 common shares for $336,000. On August 19, an additional 8,400 shares were issued for $100,800. On November 2, the company paid $32.256 to repurchase 3,360 common shares and on December 7 it paid $58.240 to repurchase 4,480 common shares. (a) Your answer is correct. Calculate the average cost of the common shares on places, ag. 15.25.) June 8 Aug 19 Nov. 2 Dec. 7 $ $ 5 $ Average Cost 10 10.40 10.40 10.40 hares on June 8, August 19. November 2, and December 7. (Round arewers to 2 decimal
Swifty Corporation sold 310 shares of treasury stock for $35 per share. The cost for the shares was $25. The entry to record the sale will include a A) debit to Paid-in Capital in Excess of Par for $3100. B) credit to Treasury Stock for $10850. C) credit to Gain on Sale of Treasury Stock for $7750. D) credit to Paid-in Capital from Treasury Stock for $3100.