John wants to invest in shares and is trying to decide between two companies (Company A and Company B) in the same industry. After doing his research he notes the following about the two companies: Measure Company A Company B Share Price $10 $15 Earnings Per Share $1 $1 Dividend $0.50 $1 PE Ratio 10 15 Dividend Yield 5% 7% Having critically examined the five measures, John decided to purchase 1.5m shares in Company B. At the time when John purchased the shares, the value of the equity shares was $3m and the par value was $0.40. Required: a. Explain how each of the measures identified by John could help him in deciding on which company’s shares to buy. b. How did the stock market help John to purchase the shares in Company B c. Calculate John’s shareholding in Company B and the cost on his investment? d.. What are the benefits John obtains by being a shareholder in Company B?

John wants to invest in shares and is trying to decide between two companies (Company A and Company B) in the same industry. After doing his research he notes the following about the two companies: Measure Company A Company B Share Price $10 $15 Earnings Per Share $1 $1 Dividend $0.50 $1 PE Ratio 10 15 Dividend Yield 5% 7% Having critically examined the five measures, John decided to purchase 1.5m shares in Company B. At the time when John purchased the shares, the value of the equity shares was $3m and the par value was $0.40. Required: a. Explain how each of the measures identified by John could help him in deciding on which company’s shares to buy. b. How did the stock market help John to purchase the shares in Company B c. Calculate John’s shareholding in Company B and the cost on his investment? d.. What are the benefits John obtains by being a shareholder in Company B?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

ChapterC2: Spatial Technology, Inc.

Section: Chapter Questions

Problem kA

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1.) You purchase 600 shares of XYZ Corporation at $30 per share using an initial margin of 70%. The stock is now selling for $41 per share and you want to use the excess equity in your account to pyramid. You want to purchase 400 shares of JT Corporation at $122 per share. If the minimum initial margin is 60%, what is the minimum amount of equity that you will have to put up in this transaction? 2. You purchase 500 shares of Johns Incorporated at $50 per share using an initial margin of 60%. Your maintenance margin is 25% and the minimum initial margin is 50%. A. How low can the stock price fall before you receive a margin call? B. If the stock price falls to $21 a share, how much additional equity must you add to your account?
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Assuming yourself to be Anna, narrate what you would have read in the file. Your narrative should include answers to the following: Note: 1 Retention ratio = 1 – Dividend payout ratio a) What is the current Dividend per share (DPS) for Chatterbox Inc., assuming a 100% dividend payout policy?
Please answer is 24840, only post if your answer comes this with explanation and concept. Thabks!
The Peter Corporation and the Sellers Company have both announced IPOs. You place an order for 1,250 shares of each IPO. One of the IPOs is underpriced by $15.50 and the other is overpriced by $8.25. If you could get all of the shares you ordered for each IPO, what would your profit be? Multiple Choice $9,062.50 $7,552.00 $19,375.00 $8,307.25 $29,687.50 The Bert Corporation and Ernie, Incorporated, have both announced IPOs. You place an order for 550 shares of each IPO. One of the IPOs is underpriced by $15.00 and the other is overpriced by $5.75. You will receive all of the shares you ordered of the overpriced IPO, but only one-half of the shares you ordered of the underpriced IPO. What profit do you expect? Multiple Choice $5,087.50 $4,125.00 $3,332.25 $962.50 $11,412.50 Gravity Company needs to raise $49 million to fund its expansion plans. The company will sell shares at a price of $28.20 in a general cash offer and the…
Could you help me figure out the cost of equity and WACC for a company based on the information below? This is for a scenario where Kelvin, who’s just been appointed as the financial manager of MetaGreen, wants to apply his understanding of the cost of capital from his finance course to make sound financial decisions. Here’s the company information: Company Listing and Stock Info: Listed on the stock exchange Common stock market value: $2,080,000 Beta: 2 Market risk premium: 4% Risk-free rate: 3% Cost of Capital Components: Cost of debt: 7% Cost of preferred stock: 8% Tax rate: 34% Preferred Stock Details: 40,000 preferred shares outstanding Market price of preferred stock: $34 per share Bond Info: Bonds' total market value: $560,000 Could you show me how to use CAPM to find the cost of equity and then calculate the weighted average cost of capital (WACC) for the company?
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2. You purchase 600 shares of Jenkins Corporation at $30 per share using an initial margin of 70%. The stock is now selling for $41 per share and you want to use the excess equity in your account to pyramid. You want to purchase 400 shares of Watson Corporation at $122 per share. If the minimum initial margin is 60%, what is the minimum amount of equity that you will have to put up in this transaction?
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Solve the problem with complete solution. 5. You purchased 50 stocks from a corporation at 400 per share and sold them at 535 per share. Calculate your profit.