Suppose a company has a pre - IPO value of $41,000,000, has 2,000,000 existing shares, needs 9, 000, 000 in net proceeds, and the investment bank charges a 10% spread. What is the offering share price?
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- Suppose instead that the company is about to pay a dividend of $2.00 per share. You also learn that the company is expected to have net income of $100 million, dividends of $50 million, and total equity of $1.5 billion (and that these relationships are expected to be stable). If the relevant required rate of return is 10%, what is the intrinsic value per share of the company’s stock?The stock of North American Danduff Company is selling at $80 per share. The firm pays a divdend of $2.50 per share. a) What is the dividend yield? b) If the firm has a payout rate of 50% , what is the firm's P/E ratio?Anle Corporation has a current price of $16, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $24. a. What is Anle's expected dividend yield? b. What is Anle's expected capital gain rate? c. What is Anle's equity cost of capital?
- Prblmwhat is the firm’s cost of preferred stock and cost of a new issue of common stock? Which of the two sources offers a lower cost?Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming year. You have determined that its present capital structure (80% equity and 20% debt) is optimal, and its net income is forecasted at $140 million. Use the residual distribution approach to determine IWT’s total dollar distribution. Assume for now that the distribution is in the form of a dividend. Suppose IWT has 100 million shares of stock outstanding. What is the forecasted dividend payout ratio? What is the forecasted dividend per share? What would happen to the payout ratio and DPS if net income were forecasted to decrease to $90 million? To increase to $160 million? In general terms, how would a change in investment opportunities affect the payout ratio under the residual distribution policy? What are the advantages and disadvantages of the residual policy? (Hint: Don’t neglect signaling and clientele effects.)
- Anle Corporation has a current price of $13, is expected to pay a dividend of $2 in one year, and its expected price right after paying that dividend is $22. What is Anle's expected dividend yield? (Round to two decimalplaces.) What is Anle's expected capital gain rate? (Round to two decimalplaces.) What is Anle's equity cost of capital? (Round to two decimalplaces.)Assume that a company’s shares has intrinsic value P125 per share and is trading at P130. This company requires an 6% minimum rate of return and will pay a dividend per share next year which is expected to increase by 4% annually. a. How much the company will pay for dividend per share? b. What is the status of the shares in the market?Anle Corporation has a current price of $20, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $22. What is Anle’s expected dividend yield? What is Anle’s expected capital gain rate? What is Anle’s equity cost of capital?
- Anle Corporation has a current price of $29, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $30. a. What is Anle's expected dividend yield? b. What is Anle's expected capital gain rate? c. What is Anle's equity cost of capital? a. What is Anle's expected dividend yield? Anle's expected dividend yield is%. (Round to two decimal places.) b. What is Anle's expected capital gain rate? Anle's expected capital gain rate is %. (Round to two decimal places.) c. What is Anle's equity cost of capital? Anle's equity cost of capital is%. (Round to two decimal places.)Assume Evco, has a current stock price of $51.07 and will pay a $1.95 dividend in one year, its equity cost of capital is 10%. What price must you expect stock to sell for immediately after the firm pays the dividend in one year to justify its current price?Suppose ABC Corp is expected to pay $2.00 per year in dividends per share for the foreseeable future. If the required return on their stocks is 12.15%, what is one share worth?