PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Textbook Question
Chapter 4, Problem 3PS
Stock quotes* Here is a small part of the order book for Mesquite Foods:
- a. Georgina Sloberg submits a market order to sell 100 shares. What price will she receive?
- b. Norman Pilbarra submits a market order to buy 400 shares. What is the maximum price that he will pay?
- c. Carlos Ramirez submits a limit bid order at 105. Will it execute immediately?
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Here is a small part of the order book for Mesquite Foods:
Bid
Ask
Price
Size
Price
Size
$ 102
230
$ 102.50
460
$ 101.50
460
$ 102.80
460
$ 100
920
$ 103
820
$ 98.80
690
$ 103.50
790
a. Georgina Sloberg submits a market order to sell 230 shares. What price will she receive?
Price
b. Norman Pilbarra submits a market order to buy 920 shares. What is the maximum price that he will pay?
Note: Round your answer to 2 decimal places.
Maximum price
Here is a small part of the order book for Mesquite Foods:
Bid
Ask
Price
Size
Price
Size
$ 98
190
$ 98.50
380
$ 97.50
380
$ 98.80
380
$ 96
760
$ 99
660
$ 94.80
570
$ 99.50
670
a. Georgina Sloberg submits a market order to sell 190 shares. What price will she receive?
Price
$
Answer is complete and correct.
98
b. Norman Pilbarra submits a market order to buy 760 shares. What is the maximum price that he will pay?
Note: Round your answer to 2 decimal places.
× Answer is complete but not entirely correct.
Maximum price
$
98.00
Here is a small part of the order book for Mesquite Foods:
Price
97
96.5
95
93.8
Bid
Price
Size
180
360
720
540
Price
97.5
97.8
98
98.5
Maximum price
Ask
a. Georgina Sloberg submits a market order to sell 180 shares. What price will she receive?
Size
360
360
620
640
b. Norman Pilbarra submits a market order to buy 640 shares. What is the maximum price that he will pay? (Round your answer to 2
decimal places.)
c. Carlos Ramirez submits a limit bid order at 99. Will it execute immediately?
Chapter 4 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 4 - Stock markets True or false? a. The bid price is...Ch. 4 - Stock quotes a. I would like to sell 1000 shares...Ch. 4 - Stock quotes Here is a small part of the order...Ch. 4 - Stock quotes Go to finance.yahoo.com and get...Ch. 4 - Valuation by comparables Look up P/E and P/B...Ch. 4 - Dividend discount model True or false? a. All...Ch. 4 - Dividend discount model Respond briefly to the...Ch. 4 - Dividend discount model Company X is expected to...Ch. 4 - Dividend discount model Company Y does not plow...Ch. 4 - Constant-growth DCF model Company Zs earnings and...
Ch. 4 - Prob. 11PSCh. 4 - Constant-growth DCF model Pharmecology just paid...Ch. 4 - Prob. 13PSCh. 4 - Cost of equity capital Under what conditions does...Ch. 4 - Cost of equity capital Each of the following...Ch. 4 - Two-stage DCF model Company Z-prime is like Z in...Ch. 4 - Two-stage DCF model Consider the following three...Ch. 4 - Two-stage DCF model Company Qs current return on...Ch. 4 - Two-stage DCF model Compost Science Inc. (CSI) is...Ch. 4 - Growth opportunities If company Z (see Problem 10)...Ch. 4 - Growth opportunities Alpha Corps earnings and...Ch. 4 - Prob. 24PSCh. 4 - Prob. 25PSCh. 4 - Prob. 26PSCh. 4 - Horizon value Suppose the horizon date is set at a...Ch. 4 - Valuing a business Permian Partners (PP) produces...Ch. 4 - Valuing a business Construct a new version of...Ch. 4 - Valuing a business Mexican Motors market cap is...Ch. 4 - Valuing a business Phoenix Corp. faltered in the...Ch. 4 - Constant-growth DCF formula The constant-growth...Ch. 4 - DCF valuation Portfolio managers are frequently...Ch. 4 - Valuing a business Construct a new version of...
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- Here is a small part of the order book for Mesquite Foods: Bid Size 100 Price Size 200 $ 103 $ 102.50 200 $ 101 300 $ 99.80 400 a. Georgina Sloberg submits a market order to sell 100 shares. What price will she receive? 200 400 300 Ask Price $103 Price $ 103.50 $ 103.80 $ 104 $ 104.50 Answer is complete and correct. b. Norman Pilbarra submits a market order to buy 400 shares. What is the maximum price that he will pay? Note: Round your answer to 2 decimal places. Answer is complete but not entirely correct. Maximum price $ 101.00 c. Carlos Ramirez submits a limit bid order at 105. Will it execute immediately? Yes Noarrow_forwardYou would like to sell 200 shares of Xenith Bankshares, Inc. (XBKS). The current ask and bid quotes are $4.66 and $4.62, respectively. You place a limit sell order at $4.65.If the trade executes, how much money do you receive from the buyer?arrow_forwardHere is a small part of the order book for Mesquite Foods: Bid Price Size 110 $ 90 $89.50 220 $ 88 440 $ 86.80 330 Price Ask Price $90.50 $90.80 Maximum price $91 $ 91.50 Size 220 220 a. Georgina Sloberg submits a market order to sell 110 shares. What price will she receive? 340 430 b. Norman Pilbarra submits a market order to buy 440 shares. What is the maximum price that he will pay? Note: Round your answer to 2 decimal places. c. Carlos Ramirez submits a limit bid order at 92. Will it execute immediately? Yes Noarrow_forward
- You would like to sell 200 shares of Xenith Bankshares, Inc. (XBKS). The current ask and bid quotes are $4.32 and $4.28, respectively. You place a limit sell order at $4.31.If the trade executes, how much money do you receive from the buyer? (Round your answer to 2 decimal places.)arrow_forwardYou would like to sell 220 shares of Echo Global Logistics, Inc. (ECHO). The current ask and bid quotes are $15.44 and $15.39, respectively. You place a limit sell order at $15.43.If the trade executes, how much money do you receive from the buyer?arrow_forwardUse the table for the question(s) below. Consider the following two quotes for XYZ stock: November 11th November 18th Ask: 25.25 Ask: 26.00 Bid: 25.20 Bid: 25.93 How much would you have to pay to purchase 100 shares of XYZ stock on November 18th? A) $2520 B) $2525 C) $2593 D) $2600arrow_forward
- You find the following order book on a particular stock. The last trade on the stock was at $66.76. Buy Orders Sell Orders Shares Price Shares Price 250 $66.75 250 $66.78 500 66.74 650 66.79 900 66.73 1,000 66.81 275 66.71 300 66.82 100 66.83 a. If you place a market buy order for 200 shares, at what price will it be filled? (Round your answer to 2 decimal places.) b. If you place a market sell order for 200 shares, at what price will it be filled? (Round your answer to 2 decimal places.) c. Suppose you place a market order to buy 500 shares. At what price will it be filled? Choose the appropriate answer. multiple choice 500 shares at $66.83 250 shares at $66.78 and 250 shares at $66.79 250 shares at $66.83 and 250 shares at $66.82 500 shares at $66.76arrow_forwardConsider the following limit order book. Limit buy order: Price Size 84.77 200 84.76 100 84.75 400 Limit Sell Order Price Size 84.79 100 84.80 300 85.70 700 If you submitted a market sell order for 400 shares, how much would you receive?arrow_forwardKnight Inventory Systems, Incorporated, has announced a rights offer. The company has announced that it will take three rights to buy a new share in the offering at a subscription price of $45. At the close of business the day before the ex-rights day, the company’s stock sells for $80 per share. The next morning, you notice that the stock sells for $60 per share and the rights sell for $2 each. a. What is the value of the stock ex-rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value of a right? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. Are the rights underpriced or overpriced? d. What is the amount of immediate profit per share that you can make on ex-rights day per share? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)arrow_forward
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