Problem 1Duke & Duke currently has 4.5million shares of stock outstanding and willreport earnings after taxes of $6.8 million inthe current year. The company has hiredGoldman Sachs as the lead underwriter andis considering the issuance of 800, 000additional shares that will sell to the publicfor $36 per share, with a 6.25%underwriting spread.A) Calculate the netprice per share to the corporation that Duke& Duke will receive. B) How much will Duke& Duke receive from the sale of additionalshares in total net proceeds?C) Calculatethe Earnings Per Share before the stockissue.D)d. Calculate the Earnings Per Shareimmediately after the issue.E) What will theearnings per share be if the company canearn 9.25% on the total net proceeds of thestock issue in time to include it in thecurrent year's earnings. F) Should Duke &Duke proceed with the issuance of newshares?

A) Net Price Per Share to the Corporation:The net price per share to the corporation is calculated…

Answered: Problem 1Duke & Duke currently has 4.5…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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question 2 a) Fr berhad has 6.5 million shares of common stock outsdanding with a market price of RM14 per share. This company has a market value of RM10 million outstanding preferred stock. their corporate bonds outstanding is 25,000 with face value of RM1000 and selling at 90% of face value on the bond market.The cost of equity is 14%, the cost preferred is 10% and the pre- tax cost of debt is 7.5%. Their marginal corporate tax rate is 30%. i) Calculate the market value for common stoc preferred stock, corporate bond and firm. ii)calculate the firm's Weightage average cost of capital (WACC).
AFW Industries has 211 million shares outstanding and expects earnings at the end of this year of $652 million. AFW plans to pay out 58% of its earnings in total, paying 30% as a dividend and using 28% to repurchase shares If AFW's earnings are expected to grow by 8.3% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 11.2% The price per share will be $ (Round to the nearest cent.)
Task 6. ANGEL Company plans to acquire a processing plant for P40 million. To finance the acquisition, the business will issue 6% preference shares with a par value of P100 per share. The selling price of the preference shares is P150. the business is subject to a 30% income tax rate, and has declared dividends to preference shares of P6 the previous year. Required: Compute the cost of preference share.
i need the answer quickly
Answer in excel format and explain formulas used.
WACC
↑ Valence Electronics has 229 million shares outstanding. It expects earnings at the end of the year of $770 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares If Valence's earnings are expected to grow by 7% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? OA. $53.80 OB. $10.09 OC. $67.25 OD. $20.18 Gme
Estimate a reasonable intrinsic stock price per share as of 01/01/2023 for private Manufacturing Company A given the information in the table below. Also assume that the company has a 10.50% weighted average cost of capital, $5,542 million excess cash holdings, $25,000 million market value of debt, 1,000 million shares outstanding, and 2.0% FCF terminal growth rate starting at the end of 2027. Assume that the cash flows depicted in the table below occur at the end of each year (i.e., -600 is FCF1 and 16,500 is FCF5).
#18
Problem 1 You are considering purchasing a share of Belgravia Petroleum Inc. The company just announced its earnings per share of $2.50. Management predicts that earnings will grow at 10% per year for the next 4 years and then at 1% thereafter. Belgravia's policy is to pay out 40% of its earnings in dividends. The discount rate for Belgravia is 12%. How much is the stock price of Belgravia?
Intro Munich Re Inc. is expected to pay a dividend of $4.82 in one year, which is expected to grow by 4% a year forever. The stock currently sells for $69 a share. The before-tax cost of debt is 7% and the tax rate is 34%. The target capital structure consists of 20% debt and 80% equity. Part 1 What is the company's weighted average cost of capital? 3+ decimals Submit
Caribbean Power Supply Limited has the following capital structure:i. Debt 40%ii. Preferred shares 10%iii. Common shares 50%The company is issuing preferred stock at $130 per share with a stated dividend of $16.75 and aflotation cost of 5%. For its common stock, Caribbean Power expects the next dividend paymentto be $3.30 per share. The price of its common stock is currently $22 and it is estimated that thefirm will grow at a constant rate of 5%. Also, the cost of debt for is 12% and the tax rate is 40%.A. Compute the cost of debt, preference share and common stock for Caribbean PowerSupply Limited. B. Calculate the Weighted Average Cost of Capital (WACC). C. Comment on the WACC computed at B. D. Discuss FOUR (4) problems this company might face as a result of being highly geared.

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