Suppose that Home Depot, Inc. (HD) is currently holding shares of Apple Inc. (AAPL) and Autozone Inc. (AZO). It owns 57% of AAPL and 43% of AZO. The market values of shares are $2,910,800 and $5,710,200, respectively. HD has total 48,750 shares outstanding. Based on the efficient market approach, the per-share value of HD is closest to OA. $98.15. B. $92.70. O C. $84.40. O D. $73.79.

Suppose that Home Depot, Inc. (HD) is currently holding shares of Apple Inc. (AAPL) and Autozone Inc. (AZO). It owns 57% of AAPL and 43% of AZO. The market values of shares are $2,910,800 and $5,710,200, respectively. HD has total 48,750 shares outstanding. Based on the efficient market approach, the per-share value of HD is closest to OA. $98.15. B. $92.70. O C. $84.40. O D. $73.79.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

BK Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of P200, and 100 shares of stock. If BK converts its short-term investments to cash and repurchases P100 of its stock, what is the resulting estimated intrinsic stock price and how many shares remain outstanding?
Determine by how much an ABC share/ or the ABC firm is over/(undervalued).
Silicone Systems Inc. shares are trading for $500. Analysts expect Silicone to generate net income of $41.7 billion. Silicone has 900 million shares outstanding. The average P/E ratio of Silicone's competitors is 18. What is the fair price for a share of Silicone Systems? O $463 $500 O $751 $834
Cliff Corp (CC) has assets of $300 million including $25 million in cash. CC has 1 million share of stock outstanding and $70 million of debt. Assume capital markets are perfect. What is CC’s current debt-to-equity ratio? What is CC’s current stock price? If CC distributes $18 million in dividends, then what is the new ex- dividend share price? If instead of paying the dividend CC repurchases $18 million of stock, then what will be the new share price? What is the new debt-to-equity ratio after the payout?
NFG investment company that has 4 million shares outstanding has total assets of $62 million and total liabilities of $12 million. If this investment company charges a load of 3.5%, how much would an investor have to pay to purchase one share? . (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
. If TAM's stock is currently trading at AED 50 and TAM has 15 million shares outstanding, shareholder equity of 400 million, total assets 700 million and cash of 10 million, What is the TAM's market-to-book ratio, the market capitalization and the enterprise value.
Damron, Incorporated, has 205,000 shares of stock outstanding. Each share is worth $79, so the company’s market value of equity is $16,195,000. Suppose the firm issues 44,000 new shares at the following prices: $79, $73, and $67. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share?
For example, GoTo completes its IPO on April 12, 2022 and is listed on the IDX. GOTO released 40,615,056,000 shares at a selling price of Rp. 338/unit with an underwriting discount of 5%. Investors in the secondary market pay only Rp. 300 per share of GoTo's outstanding shares of 50,000,000,000. Calculate: a. Total proceeds and net proceeds for IPO GoTo b. How much does the underwriting fee cost? c. What is the market capitalization for the outstanding GoTo shares? d. Calculate IPO underpricing and explain IPO underpricing for GoTo
Suppose Beta Industries and Delta Technology have identical assets that generate identical cash flows. Beta Industries is an all-equity firm, with 7 million shares outstanding that trade for a price of $16.00 per share. Delta Technology has 22 million shares outstanding, as well as debt of $33.60 million. a. According to MM Proposition I, what is the stock price for Delta Technology? b. Suppose Delta Technology stock currently trades for $8.27 per share. What arbitrage opportunity is available? What assumptions are necessary to exploit this opportunity? a. According to MM Proposition I, what is the stock price for Delta Technology? According to MM Proposition I, the stock price per share for Delta Technology is $ (Round to the nearest cent.)
Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $18.40 per share for 670,000 shares. The company will receive $16.75 per share and will incur $225,000 in registration, accounting, and printing fees. 1. What is the spread on this issue in percentage terms? 2. What are the total expenses of the issue as a percentage of the total value (at retail)?
To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data about the company's stock: D1 $1.45; PO = $25; and g = 6.50% (constant). What is the cost of common from issuing new stock, assuming the flotation cost is 10% of the stock price? = 13.59% 11.10% 12.94% 11.68% 12.30%
Manufacturer ABC has earnings per share of $3.30 and EBITDA of $40.7 million. The company also has 6.4 million shares outstanding. You believe that XYZ Corporation is comparable to ABC in terms of its underlying business, and it has a P/E of 14.3. Estimate the value of ABC’s shares using P/E as a valuation multiple (to the closest integer)

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