After successfully completing your corporate finance class, you feel the next challengeahead is to serve on the board of directors of Cornwall Enterprises. Unfortunately, youwill be the only person voting for you. The company has 720,000 shares outstanding,and the stock currently sells for $48. Assume the company uses cumulative voting andthere are four seats in the current election. How much will it cost you to buy a seat? (Donot round intermediate calculations. Enter your answer in dollars, not millions ofdollars, e.g., 1,234,567.)Total cost

Straight voting system: To win the election shareholders will be required to have 50% of total…

Answered: After successfully completing your…

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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Three friends are starting a home painting business while they are in college. One of the friends is from a wealthy family and will finance the startup costs – website development, advertising and purchasing the paint, in return for a 50% share of the business. The other two friends will each own 25% of the business. They may have two or three employees who will be paid by the job and will not own any of the business. They expect to distribute to themselves all the earnings of the business every month. Once they graduate from college, they expect to leave the business and have their brothers and sisters take over. They have no plans to grow the business beyond one or two projects at a time. Which form of ownership should they use as they start up this business?
You founded your firm with a contribution of $700,000, receiving 1,000,000 shares of stock. Since then, you sold 5,000,000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $7,000,000 and would receive 5,000,000 newly issued shares. What is the post-money valuation? Express the terms of your answer completely and in strictly numerical terms. For example: If your answer is one million dollars, write: 1000000.
Joy wants to invest his funds in shares in one of the two existing manufacturing companies. The following information about the dividend paid during the seven years of the Year Brown Company Avel Company 2000 500 300 2001 600 557 2002 665 615 2003 675 640 2004 785 790 2005 800 815 2006 815 795 If you as an investment consultant who is conducting an analysis of the two companies, with Using trend analysis, which company would you recommend to Joy for his investment in 2010? (work with complete procedure)
Scenario 1.Your grandparents gave you ₱ 175,000.00 on your 16th birthday. You wereinstructed to invest the money so that the earnings can be used to pay for yourtuition fee in college. Having heard about the risks and rewards of the stockmarket from your parents, you become interested in buying stocks in aparticular company. Below are the options given to you by your parents:Option1: Company ABC’s selling stock is ₱ 1,500.00 per share that will have adividend of ₱ 200.00 per year. The stock can be sold after two years at ₱2,000.00and the market requires a rate of return of 15%.Option2: Company XYZ’s selling stock is ₱ 1,000.00 per share that will have adividend of ₱ 180.00 per year. The stock can be sold after two years at ₱2,000.00and the market requires a rate of return of 7%.In which company will you invest your money? Why?
Hello, thank you for the help. The answer is coming back as incorrect.
Your uncle passed away and left you $10 million with the stipulation that it be invested in real estate in the next 90 days. As word of your newfound wealth leaked into the real estate brokerage community, a line of brokers formed outside your door.“You should buy this office building” said the first broker, Ira Our. “At $20 million you’ll have to borrow money to buy it, but I know an Office Building REIT that wants to buy it for $21 million. The problem is that their Investment Committee doesn’t meet until next week and the Seller needs a binding Letter of Intent this week. You can flip the building in 45 days to the Office Building REIT and, after all expenses, pocket a quick $500,000. It works out to a 32.5% Internal Rate of Return. How are you going to beat that?”What are the practical and theoretical weaknesses in the investment/valuation methodology of Ira Our?
You are given the following information about Aisha Enterprises. The company would like to raise capital through shares only. It has five alternative operational periods in which to raise funds. The company has 25,000 ordinary shares at $10 per share. It has 2500 preference shares of $ 100 each. The dividend on preference shares is 8%. The tax rate is 25 % and the interest rate is 15%. The company would like to raise $2 million. You are required to complete an EBIT/EPS Analysis for the company. A B C D E EBIT 400,000 600,000 700,000 800,000 900,000
Your grandparents gave you ₱175,000.00 on your 16th birthday. You were instructed to invest the money so that the earnings can be used to pay for your tuition fee in college. Having heard about the risks and rewards of the stock market from you parents, you become interested in buying stocks in a particular company. Below are the options given to you by your parents Option 1: Company ABC’s selling stock is ₱1,500.00 per share that will have a dividend of ₱200.00 per year. The stock can be sold after two years at ₱2,000.00 and the market requires a rate of return of 15%. Option 2: Company XYZ’s selling stock is ₱1,000.00 per share that will have a dividend of ₱180.00 per year. The stock can be sold after two years at ₱2,000.00 and the market requires a rate of return of 7%. In which company will you invest your money? Why?
Bob invested 3,000 and borrowed 3,000 to purchase shares in Verizon communications. At the time of his investment Verizon was selling for 47 a share. If bob paid a 30 commission how many shares could he buy if he used only his own money and did not use margin?
Give typing answer with explanation and conclusion 1. To incentivize our employees, we are considering issuing them employee equity. The average employee would be issued stock options to purchase 800 shares at our current stock price of $210 per share. We are hopeful that the Smoothie business will catapult us to $230 per share in the future but recognize the risks. If an employee exercises the options at $210 per share, how much would the employee make before taxes?
You are very optimistic about the personal computer industry, so you buy 200 shares of Microtech Inc. at $45 per share. You are very pessimistic about the machine tool industry, so you sell short 300 shares of King Tools Corporation at $55. Each transaction requires a 40 percent margin balance. a. What is the initial equity in your account? b. Assume the price of each stock is as follows for the next three months (month-end). Compute the equity balance in your account for each month: Month Microtech Inc. King Tools Corp. October $51 $48 November 39 62 December 37 40
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

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