A firm wants to raise $40 million through a rights offering. The subscription price is set at $40. Currently, the company has 3 million shares outstanding with a current market price of $50 a share. Each shareholder will receive one right for each share of stock they currently own. How many rights will be needed to purchase one new share of stock in this offering? O 3 O 5 O 4 O 6

A firm wants to raise $40 million through a rights offering. The subscription price is set at $40. Currently, the company has 3 million shares outstanding with a current market price of $50 a share. Each shareholder will receive one right for each share of stock they currently own. How many rights will be needed to purchase one new share of stock in this offering? O 3 O 5 O 4 O 6

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You are negotiating with your underwriters in a firm commitment offering of 10 million primary shares. You have two options: set the IPO price at $25.00 per share with a spread of 8%, or set the price at $24.20 per share with a spread of 6%. Which option raises more money for your firm?
Nougat Corporation wants to raise $4.9 million via a rights offering. The company currently has 550,000 shares of common stock outstanding that sell for $50 per share. Its underwriter has set a subscription price of $25 per share and will charge the company a spread of 5 percent. If you currently own 3,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) I keep getting the wrong answer, I get $2,430 and its not correct, the answer 20130 is also not correct.
Nougat Corporation wants to raise $4.9 million via a rights offering. The company currently has 550,000 shares of common stock outstanding that sell for $50 per share. Its underwriter has set a subscription price of $25 per share and will charge the company a spread of 5 percent. If you currently own 3,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) I keep getting the wrong answer, I get $2,430 and its not correct, the answer 20130 is also not correct, and the answer 20459.29 is also not correct
Atlas Inc. currently has 20 million shares outstanding. The current stock price is $35/share. The company has decided to do a rights issue. Every existing shareholder will be given 1 right for each share that they own. It will take 4 rights to buy one new share at a price of $25 per share. How much money will the company raise if all of the rights are exercised? Question 9 options: A) $700,000,000 B) $450,000,000 C) $500,000,000 D) $125,000,000 E) $105,000,000
Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $55 per share. Its underwriter has set a subscription price of $30 per share and will charge the company a spread of 6 percent. If you currently own 5,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Sale proceeds
Ray is about to go public. Its present stockholders own 530,000 shares. The new public issue will represent 1,000,000 shares. The shares will be priced at $20 to the public with a 10% spread. The out-of-pocket costs in addition to the spread will be $570,000. What are the net proceeds to Ray?
Roundtree Software is going public using an auction IPO. The firm has received the following bids: Number of Shares 120,000 200,000 560,000 1,200,000 1,240,000 800,000 400,000 Price $14.60 14.40 14.20 14.00 13.80 13.60 13.40 Assuming Roundtree would like to sell 2.08 million shares in its IPO, what will the winning auction offer price be? The price will be $ per share. (Round to two decimal places.)
Bin plc is taking over Sum plc and has offered two Bin shares for every three Sum shares. You have the following information: Bin plc Sum plc Current share price: £3.01 £1.48 Number of shares: 20m 10m Market value: £60.2m £14.8m Distributable earnings: £5.6m £1.23m Synergy is expected to produce a 5% increase of the combined earnings. The market will apply a price/earnings ratio of 10.75 times to the new entity. What is the expected change in the wealth of Sum's shareholders? Answers: 10.2% 15.2% 25.7% 30.3% 35.6%
An IPO is offered at $9.50 per share for 7 million shares. The IPO underwriters had a spread of 7.25%. What price did the underwriters pay per share of the IPO firm? A. $8.81 B. $9.50 C. $8.86 D. $9.17 E. $10.19
A firm is making an initial public offering. The investment bankers agree to a firm-commitment underwriting for 480,000 shares that would be priced to the public at $33 per share. The underwriter’s spread is 6 percent. What will be the proceeds for the issuer and the underwriter?
Myers Inc. currently has 5, 750,000 shares outstanding, and they trade at a price of $23.76. They need to raise $35,000,000 in new funding, and will execute a Rights Offering at a subscription price of $18.00 per share. At the current share price, what will be the price of one Right leading up to the subscription? Group of answer choices $3.04 $1.46 $1.74 $22.30 $2.96

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