Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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SoFi Technologies Inc. (SOFI) currently has 13 million shares of common stock outstanding and is selling for $215 a share. The company is planning to conduct a 5-for-1 stock split.
- If SOFI declares a 5-for-1 stock split, what will the price of the company’s stock be after the split—assuming that the total value of the firm’s stock remains the same before and after the split?
- How many shares of SOFI will be outstanding?
- Now imagine of instead of performing a stock split, SOFI decides to pay a stock dividend. If SOFI declares a 5.5% stock dividend, how many shares will the firm issue to existing shareholders?
- Now, in lieu of conducting a stock split or declaring a stock dividend, SOFI decides to buyback 1,500,000 shares of stock at market price. How much cash will it take to perform this buyback?
- Using the same information as Question #4, if SOFI performs the buyback, what should the new market share price be assuming the total value of the company hasn't changed? Round answer to nearest cent
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- LYFT IPO was issued at $72/share. Before the IPO, Lyft had 240 million class A shares outstanding and wanted to issue additional 30 million class A shares. On top of that, Lyft gave its underwriters options to purchase another 5 million shares at $72 each. When Lyft stock price fell below the IPO price of $72, to support the stock price, up to how many shares the underwriters could buy from the open market without losing money? 5 million shares 30 million shares 35 million shares 240 million shares 275 million sharesarrow_forwardDamron, Incorporated, has 205,000 shares of stock outstanding. Each share is worth $79, so the company’s market value of equity is $16,195,000. Suppose the firm issues 44,000 new shares at the following prices: $79, $73, and $67. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share?arrow_forwardConsider company Macrosoft, whose current stock price is 542. The board of directors of Macrosoft has decided to engage a spin-off. Each shareholder of Macrosoft will receive 3.50232 shares of Coco Colo, whose stock price is 8.34, for each share of Macrosoft owned. Consider an investor who currently owns 152 shares of Macrosoft. What is the amount of cash that this investor will receive after that spin-off? A) 4436.88 B) 2.941 C) 4439.821 D) 636.781arrow_forward
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