Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Question
Chapter 23, Problem 16P
a.
Summary Introduction
To determine: The expected total amount that a firm raised from the IPO.
Introduction: When a company sells its share publically in an open market for the first time, it is known as initial public offering (IPO).
b.
Summary Introduction
To determine: The market value of the firm after the IPO.
c.
Summary Introduction
To determine: The share price as per given case.
d.
Summary Introduction
To determine: The total cost to the firm’s original investors due to market imperfections from the IPO.
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Please use Excel to solve: You have just purchased a share of stock for $20. The company is expected to pay a dividend of $0.50 per share in exactly one year. If you want to earn a 10% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend?
You have just purchased a share of stock for $21.11. The company is expected to pay a dividend of $0.53 per share in exactly one year. If you want to earn a 10.2% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend?
You have started a company and are in
luck—a
venture capitalist has offered to invest. You own
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$1.12
million for
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a. What is the implied price per share?
b. What is the post-money valuation?
c. What fraction of the firm will you own after the investment?
Chapter 23 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 23.1 - Prob. 1CCCh. 23.1 - Prob. 2CCCh. 23.2 - Prob. 1CCCh. 23.2 - Prob. 2CCCh. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CCCh. 23.4 - Prob. 1CCCh. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1PCh. 23 - What are the advantages and the disadvantages to a...
Ch. 23 - Prob. 3PCh. 23 - Suppose venture capital firm GSB partners raised...Ch. 23 - Prob. 5PCh. 23 - Prob. 6PCh. 23 - Prob. 7PCh. 23 - Prob. 8PCh. 23 - Prob. 9PCh. 23 - Prob. 10PCh. 23 - Prob. 11PCh. 23 - Prob. 12PCh. 23 - What is IPO underpricing? If you decide to try to...Ch. 23 - Prob. 14PCh. 23 - Prob. 15PCh. 23 - Prob. 16PCh. 23 - Prob. 17PCh. 23 - Prob. 18PCh. 23 - Prob. 19PCh. 23 - Prob. 20P
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