Associated Breweries is planning to market alcohol-free beer. To finance the venture, it proposes to make a rights issue at $17 of one new share for each two shares held. (The company currently has outstanding 100,000 shares priced at $26 a share.) Assuming that the new money is invested to earn a fair return, give values for the following: (For requirement e, do not round intermediate calculations. Round your answers to 2 decimal places.) a. Number of new shares b. Amount of new investment c. Total value of company after issue d. Total number of shares after issue e. Stock price after issue

Associated Breweries is planning to market alcohol-free beer. To finance the venture, it proposes to make a rights issue at $17 of one new share for each two shares held. (The company currently has outstanding 100,000 shares priced at $26 a share.) Assuming that the new money is invested to earn a fair return, give values for the following: (For requirement e, do not round intermediate calculations. Round your answers to 2 decimal places.) a. Number of new shares b. Amount of new investment c. Total value of company after issue d. Total number of shares after issue e. Stock price after issue

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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Seattle Adventures, Incorporated, is trying to decide between the following two alternatives to finance its new $17 million gaming center: a. Issue $17 million, 6% note. b. Issue 1 million shares of common stock for $17 per share with expected annual dividends of $1.02 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Answer the following questions for the current year: (a) By how much are interest payments higher if issuing the note? (b) By how much are dividend payments higher by issuing stock? (c) Which alternative results in higher earnings per share?
Soggy Bottom, Inc. has received a term sheet from WeBeFunding Ventures for a $4,000,000 investment. Use the following cap table and facts to answer the questions below: Round Date 1. The pre-money valuation is $8,000,000. 2. Jolly Angels invested $2,000,000 with conversion terms of the lesser of a. 20% discount off the qualified financing, and b. valuation cap of $6,000,000. The notes are interest free. 3. WeBeFunding term sheet requires establishment of an option pool of 500,000 shares immediately prior to funding. Owner Common Shares Roxanne Ben Option Pool Preferred Shares Jolly Angels Conv Note WeBeFunding Ventures Total Price per share Pre-money valuation Post-money valuation Questions Investment $1,000 $1,000 $2,000 S S S Founders 8/1/2020 Shares 1,000,000 1,000,000 Investment 50.0% S 50.0 % S $2,000,000 2,000,000 100.0% $2,000,000 0.001 2,000 Angel Round 9/1/2022 Shares A. What is the implied price/share of the WeBeFunding Ventures round? B. What is the post-money valuation? C.…
EuropCar Rental is considering two alternatives for the financing of a purchase of a fleet of cars. These two alternatives are: Issue 60,000 shares of common stock at $45 per share. Issue 12%, 10-year bonds at face value for $2,500,000. It is estimated that the company will earn $750,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 30% and has 90,000 shares of common stock outstanding prior to the new financing. Instructions Determine the eﬀect on net income and earnings per share for these two methods of financing.
The second image is the data table in the question, thank you
Vijay
Atlantis REIT expects an income of $46 per share. This includes a deduction of $40 per share for depreciation. Atlantis did not have any gains from the sale of real estate. Its properties are mainly apartments, and you believe that apartments are currently selling on average at about an 8 percent cap rate. Atlantis has 1 million shares outstanding and its balance sheet shows liabilities of $192 million. Comparable REITs have FFO multiples of about 10. Atlantis is expected to pay a dividend during the next fiscal year of $6 per share and to increase those dividends at about 2 percent per year in the future. Investors in REITs like Atlantis usually expect a return of about 12 percent. Required: a. What is the FFO and value per share based on an FFO multiple? b. What value per share is indicated using a dividend discount model? c. What is the value per share implied by the net asset value of the properties?
(Estimated time allowance: 3 minutes) The following information is from a partial view of the balance sheet of a company. Compute the cost of preferred equity/stock. Preferred stock: 10% preferred with a current price of $90. The par value of preferred stock is $60. There are 80,000 shares of the preferred stock outstanding. The tax rate is 20%. What is the cost of preferred equity (Rp)? For your answer, use percentage denomination and only use ONE decimal; do not enter the % sign. For example, if your final calculation results in 0.24576 then enter 24.6; if your final calculation results in 0.04233 then enter 4.2; if your final calculation results in 0.20 then enter 20.0
Assume Merck is announcing that it is currently in the approval phase of a Covid19 medication. A part from Merck, there is still a number of other firms competing for anapproval. If Merck is successful in being the first one getting the approval, its future freecashflow is expected to increase by EUR 800 million over the next 3 years. Pfizer has currently9 million shares outstanding at a share price of EUR 32, EUR 50 million debts and acost of capital of 7%. What do you think will happen if the market learns that Pfizer was thefirst one getting the approval for the vaccination?
Cullumber Company is a private company with sales of $1,100,000 a year. Management wants to take the company public but has to wait until the sales reach $2,000,000. If sales are expected to grow 15 percent annually, when is the earliest that Cullumber will go public? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to 1 decimal place, e.g. 5.4.) Excel Template(Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.)
Sleeping Bear Travel, Incorporated, is trying to decide between the following two alternatives to finance its new $24 million gaming center: Issue $24 million, 5% note. Issue 1 million shares of common stock for $24 per share with expected annual dividends of $1.20 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Answer the following questions for the current year: (a) By how much are interest payments higher if issuing the note?(b) By how much are dividend payments higher by issuing stock?(c) Which alternative results in higher earnings per share?
NFG investment company that has 4 million shares outstanding has total assets of $62 million and total liabilities of $12 million. If this investment company charges a load of 3.5%, how much would an investor have to pay to purchase one share? . (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Andy has borrowed $370,000 on margin to buy Lowe`s Companies Inc., which is now trading at $203 per share. With this transaction, his initial percentage margin is 35%. His broker, Shannon, states, and Andy agrees, that the maintenance margin is 25%. Based on the given information, what is the equity value in account? A. $108,301 B. $147,621 C. $199,231 D. $232,650

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