FARO Technologies, whose products include portable 3D measurement equipment, recently had 26 million shares outstanding trading at $45 a share. Suppose the company announces its intention to raise $290 million by selling new shares. How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that show losses are 30% of the size of the new issue?
FARO Technologies, whose products include portable 3D measurement equipment, recently had 26 million shares outstanding trading at $45 a share. Suppose the company announces its intention to raise $290 million by selling new shares. How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that show losses are 30% of the size of the new issue?
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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FARO Technologies, whose products include portable 3D measurement equipment, recently had 26 million shares outstanding trading at $45 a share. Suppose the company announces its intention to raise $290 million by selling new shares.
- How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that show losses are 30% of the size of the new issue?
Note: Enter your answer in millions without a sign.
- What percentage of the value of FARO’s existing equity prior to the announcement is this expected loss?
Note: Round your answer to 1 decimal place.
- At what price should FARO expect its existing shares to sell immediately after the announcement?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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