Convex Incorporated sells 50 million shares of stock in an SEO, with a market price of $10 per share. The underwriter charges 65% of the gross proceeds as a fee. How much money was raised in the sale?
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- ACE Ltd has an outstanding shares of 10,000,000 shares. Kimmy Ltd purchases 100,000 shares of ACE Ltd at $4 per share. Transaction cost is $1,000. How much will the company capitalise if the investment is classified at fair value through OCI? Choose one of the following answers. 401,000 None of the above 399,000 400,000Andy 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. $232,650Pronghorn Co. invested $1,070,000 in Stellar Co. for 25% of its outstanding stock. Stellar Co. pays out 30% of net income in dividene each year. Use the information in the following T-account for the investment in Stellar to answer the following questions. Investment in Stellar Co. 1,070,000 99,000 (a) How much was Pronghorn Co.'s share of Stellar Co's net income for the year? Net income 29,700 Total net income (b) What was Stellar Co's total net income for the year? 428000 Total Dividends. $ 396000 (c) What was Stellar Co's total dividends for the year? 128400
- Lobby Ltd is the target of an LBO. It has EBITDA of $150 million. A private equity group buys Lobby at 4 times EBITDA. The purchase is financed by $320 million debt and the remaining is equity investment by the private equity group. Five years later, EBITDA has grow to $175 million. The private equity group sells Lobby at 5 times EBITDA to a competitor. At the time of the sale, the firm still has $320 debt outstanding. Assume cash balance is negligible. 1) What is the value of equity at exit? A) 175M B) 555M C 280M 2. What is the IRR experienced by the private equity group? A) 7.84% B) 98.2% C) 14.7% 3) The positive IRR was due to A) Debt amortization and multiple expansion B) Improvement in operating performance and multiple expansion C) Improvement in operating performance, multiple epxansion, and debt amortization1) Lisa has a margin account and deposits $2500,000 into it. Assume that the prevailing margin requirement is 50%, interest and commissions are ignored and and XYZ Corp. is selling for $44 a share. a.) How many shares can Lisa purchase using the maximum allowable margin? b.) What is Lisa's profit or loss is XYZ Corp.'s stock i.) Rises to $59 and Lisa sells the stock? ii.) Falls to $32 a share and sells the stock? c.) If the maintenance margin is 30%, what price can the stock fall to before Lisa receives a margin call? 1262 20Diego has borrowed $197,450 on margin to buy Apple, Inc. (AAPL), which is now trading at $133.75 per share. With this transaction, his initial percentage margin is 37%. His broker, Tyler, states, and Diego agrees, that the maintenance margin is 20%. Based on the given information, what is the equity value in account? A. $200,078.45. B. $174.850.67. C. $139.134.09. D. $115,962.70.
- Corporation Ltd is considering raisng additional equiry via a rights issue, in the amount of $120,000. It currently has 18,000 ordinary shares outstanding that sell for $32 each. The subscription price will be $28 per share. What is the value of one right?An investment bank agrees to underwrite an issue of 15 million shares of stock for Looney Landscaping Corporation. a. The investment bank underwrites the stock on a firm commitment basis, and agrees to pay $10.00 per share to Looney Landscaping Corporation for the 15 million shares of stock. The investment bank then sells those shares to the public for $11.50 per share. How much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? If the investment bank can sell the shares for only $8.50, how much money does Looney Landscaping Corporation receive? What is the profit to the investment bank? b. Suppose, instead, that the investment bank agrees to underwrite the 15 million shares on a best efforts basis. The investment bank is able to sell 13.5 million shares for $10.00 per share, and it charges Looney Landscaping Corporation $0.325 per share sold. How much money does Looney Landscaping Corporation receive? What is the profit to the investment…Suppose Buyer Company in the problem above had invested $2,400 directly in Target’s common stock one year ago at $40 per share and sold it today at $50 per share. What would the Buyer Company’s dollar profit or loss be?
- In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. What is your capital gain on this trade?On October 1, you sold short 100 shares of Wayne stock at $25 per share. On December 1, a dividend of $3 per share was paid. On Jan 1, you covered the short sale by buying the stock at a price of $15 per share. You paid 50 cents per share in commissions for each transaction i.e. for each trade. What is the net gain of the short sale? (Show work for partial credit) O $2500 O $1500 $1200 $1150 O $1100ABC purchases 118 shares of XYZ company at $38 per share in its margin account. ABC finances part of the purchase by borrowing $1967 at a rate of 9% per year. One year later the price of XYZ shares has changed by 22%. Therefore the return earned by ABC in its marging account is % (Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places, e.g. 110.10)