A company sold 4 million shares in its IPO, at a priceof $18.50 per share. Management negotiated a fee(the underwriting spread) of 7% on this transaction.What was the dollar cost of this fee?
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of $18.50 per share. Management negotiated a fee
(the underwriting spread) of 7% on this transaction.
What was the dollar cost of this fee?
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- Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's payout ratio be?A company earns Rs. 10 per share at an internal rate of 15%. The firm has a policy of paying 40% of earning as dividends. If the required rate of return is 10%, determine the price of the share under Gorden’s Model.Solve using excelA company is planning an IPO. Its underwriters have said thestock will sell at $50 per share. The underwriters will charge a 7%spread. How many shares must the company sell to net $93 million,ignoring any other expenses? (2 million)
- What is international,inc. dol?A broker that brings new issues of small firms to the public market. Its most recent deal for Deer Park, Inc., had the following characteristics: Number of shares: 1,400,000 Proceeds to Deer Park: $13,900,000 Price to public: $15 per share The legal fees were $153,000, printing costs were $56,500, and all the other expenses were $70,000. What is the profit or loss for the broker? Profit / (Loss) $enter the profit or loss in dollarsSuppose a firm pays total dividends of $456,000 out of net income of $1.9 million. What would the firm’s payout ratio be? (Round your answer to 2 decimal places.)
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- XYZ Ltd., experts a net income of $150,000. The company has 10% of 500,000 debentures. The equity capitalization rate of the company is 10%. (a) Calculate the value of the firm and overall capitalization rate according t the net income approach (ignore income tax). (b) If the debenture debt is increased to $750,000 and interest of debt is change to 9%. What is the value of the firm and overall capitalization rate?ABC Co. just completed an IPO with an investment back in a firm commitment basis. The firm issue 6 million shares of common stock and the underwriting fees were $2.46 per share. the offering price was $30.00 per share. How much did the investment bank receive in fees; underwriting Spread?A company has just paid an ordinary share dividend of 32 cents and expected to pay a dividend of 33.6 cents in one year’s time. The company has a cost of equity of 13%. What is the market price of the company’s shares to the nearest cent on an ex dividend basis? $3.20 $4.41 $2.59 $4.20 Use the following information to answer questions 18 and 19 Bill plans to open a service centre. The equipment will cost $50,000. Bill expects the after-tax cash inflows to be $15,000 annually for 8 years, after which he plans to scrap the equipment and retire. What is the project’s regular payback period? 2.67 years 3.33 years 3.67 years 4.33 years Assume the required return is 10%. What is the project’s discounted payback period? 4.25 years 5.25 years 6 years the project does not payback on discounted basis.
