In previous years, Cox Transport reacquired 3 million treasury shares at $22 per share and, later, 2 million treasury shares at $27 per share. By what amount will Cox's paid-in capital-share repurchase increase if Cox now sells 2 million treasury shares at $30 per share and determines the cost of treasury shares by the FIFO method? (Enter answer in millions (i.e., 10,000,000 should be entered as 10).)
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- 25Taco Time Corporation is evaluating an extra dividend versus a share repurchase. In either case, $27,000 would be spent. Current earnings are $2.70 per share, and the stock currently sells for $96 per share. There are 4,500 shares outstanding. Ignore taxes and other imperfections. What will the company's EPS and PE ratio be under the two different scenarios? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. EPS PE Ratio Extra Dividend Share RepurchaseBeets Inc had 10m shares outstanding that were trading at $5. In 2020 it received a profit that was $4m higher than expected. It announced that it will use $1.25m to buy back shares. How many shares would be left in circulation after the repurchase program is complete? [enter your answer in M of shares, with 2 decimal places precision]
- If iOS Corp. issues an additional $8 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the initial capital structure is 13.85%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES. TE= Number Click "Verify" to proceed to the next part of the question.Alphabet (GOOGL) has yet to pay a dividend, but in spring 2018 it announced it would repurchase $8.5 billion worth of shares over the year. (Actually, the exact amount was $8,589,869,056-known as a "perfect" number because it is equal to the sum of its divisors). If the amount spent on share repurchases were expected to grow by 6.6% per year, and Alphabet's equity cost of capital is 7.9%, estimate Alphabet's market capitalization. If Alphabet has 710 million shares outstanding, what stock price does this correspond to? The share price is $ (Round to the nearest cent.) BECOMValiant Corp. pays a dividend of $2.5 per share and is expected to pay this amount indefinitely. If the corporation's equity cost of capital is 11%, its stock price should be $_____. (round your answer to two decimal places)
- Rock Industries has hired the investment banking firm to help for going public. Rock and investment bank agree that Rock's current value of equity is $75 million. Rock currently has 5 million shares outstanding and will issue 2 million new shares. Investment bank charges a 7% spread. What is the offer price based on this information? a. $10.93 b. $15.00 c. $14.59 d. $10.71Xijiang issued 1000 shares at the beginning of fiscal year (t=0), and the net profit at the end of fiscal year (t=1) is expected to be 2million won. (zhuxijiang plans to pay a total of 800000 won as dividends to shareholders at the end of the accounting year, and the rest will be retained for internal reinvestment. (Zhou) the average self capital profit margin (roe= current net profit of the accounting year / self capital at the beginning of the accounting year) of Xijiang in each accounting year will be maintained at 20%. (shares) Xijiang's dividend policy and self capital profit margin will continue to be maintained. The annual required rate of return (RRR) of the enterprise in the market is 16%. If the dividend growth rate (or profit growth rate) of the company is equal to the return on self capital (ROE) multiplied by the internal retention rate, please answer the following questions. The dividend discount model is used to calculate the stock price at the beginning of the…Stout Inc.'s perpetual preferred stock sells for $65.00 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? a. 10.39% b. 13.62% c. 14.40% d. 14.28% e. 11.81%
- Stag company currently pays a $4.20 annual cash dividend. Stag can issue new shares for $40 with $5 flotation cost. What is the cost of new stocks? a) 12% b) 12.5% c) 10.5% d) 8.4%Miles Co is considering a bid for Stone Co. Both companies are stock-market listed and are in the same business sector. Financial information on Stone Co, which is shortly to pay its annual dividend, is as follows: Number of ordinary shares 5 million Ordinary share price $3.30 Earnings per share 40 cents Proposed payout ratio 60% Dividend per share one year ago 23.3 cents Dividend per share two years ago 22 cents Average sector price/earnings ratio 10 a. Calculate the value of Stone Co using the price/earnings ratio method. b. Using a cost of equity of 13% and a dividend growth rate of 4.5%, calculate the value of Stone Co using the dividend growth model. c. Calculate the market capitalization of Stone CoPandora Box Company Inc. makes a rights issue at a subscription price of $5 a share. One new share can be purchased for every five shares held. Before the issue there were 15 million shares outstanding and the share price was $12. a. What is the total amount of new money raised? (Do not round intermediate calculations. Enter your answer in millions.) b. What is the expected stock price after the rights are issued? (Enter your answer rounded to 4 decimal places.) c. By what percentage would the total value of the company need to fall before shareholders would be unwilling to take up their rights? (Do not round intermediate calculations. Enter your answer as a positive percent rounded to 2 decimal places.) d. Suppose that you initially own 100 shares plus $100 in the bank. If you take up your rights issue, what will be your total wealth after the issue is completed? (Do not round intermediate calculations. Enter your answer rounded to nearest whole dollar.) e. Suppose that the company…
