Computer-Related ProblemThe problem requires you to use File C03 on the computer problem spreadsheet. DictionPublishing estimates that it needs $500,000 to support its expected growth. The underwritingfees charged by the investment banking firm for which you work are 6.5% for such issue sizes.In addition, it is estimated that Diction will incur $4,900 in other expenses related to the IPO.If your analysis indicates that Diction's stock can be sold for $40 per share,how many shares must be issued to net the company the $500,000 it needs?b. Suppose that Diction's investment banker charges 10% rather than 6.5%.Assuming that all other information given earlier is the same, how manyshares must Diction issue in this situation to net the company the $500,000a.it needs?Suppose that Diction's investment banker charges 8.2% rather than 6.5%.Assuming that all other information given earlier is the same, how many sharesmust Diction issue in this situation to net the company the $500,000 it needs?d. Suppose everything is the same as originally presented, except Diction willincur $5,835 in other expenses rather than $4,900. In this situation, howmany shares must Diction issue to net the company the $500,000 it needs?Now suppose that Diction decides it only needs $450,000 to support itsgrowth. In this case, its investment banker charges 7% flotation costs, andDiction will incur only $3,840 in other expense. How many shares must Dic-tion issue to net the company the $450,000 it needs?C₁e.f.Suppose the scenario presented in part (e) exists, except the price of Diction'sstock is $32 per share. How many shares must Diction issue to net the com-pany the $450,000 it needs?

As per the honor code of Bartleby we are bound to give the answer of first three sub part, please…

Answered: The problem requires you to use File…

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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Your sister is thinking about starting a new business. The company would require $300,000 of assets, and it would be financed entirely with common stock. She will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business? a. $44,145 b. $38,475 c. $33,210 d. $40,500 e. $41,310
You are an angel investor, and 4 entrepreneurs have approached you to build some innovative folding tables, and the proposals are as follows. Project A, an investment of 566967 and annual cash flows respectively of 415527, 209635, 199906 and 298311. Project B, an investment of 439043 and annual cash flows respectively of 417004, 150449, 117975 and 384645. Project C, an investment of 628001 and annual cash flows respectively of 140108, 507720, 225467 and 147962. Project D, an investment of 450834 and annual cash flows respectively of 102735, 111878, 508753 and 154070. If the rate expected by you is 21.33% per year of compound interest. Which project is more profitable according to the NPV (Net Present Value)?Question 1 options: d c a b
Cullumber Company is a private company with sales of $1,100,000 a year. Management wants to take the company public but has to wait until the sales reach $2,000,000. If sales are expected to grow 15 percent annually, when is the earliest that Cullumber will go public? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to 1 decimal place, e.g. 5.4.) Excel Template(Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.)
7. Your company is currently contemplating whether to buy Hot House, a national chain of computer systems consultants based in California. Your job is to estimate the market value of the equity in Hot House. To accomplish this task, you have gathered the following information. The estimated FCFF generated by Hot House for each of the next five years are as follows. CFF 1 $2,400 2 3 4 5 $2,910 $3,452 $4,452 $5,352 Subsequent to year 5, you estimate that the cash flows will grow at 6% indefinitely. Currently, the company has $5 million of debt outstanding, but that debt balance is expected to increase by 5% at the end of each year. Thus, the current debt balance of $5 million will increase to $5.25 million at the end of year 1, $5.5125 million at the end of year 2, etc. Fortunately, the before-tax cost of debt is expected to remain stable at 12%. Finally, you estimate that the required return on the unlevered equity is 16%. If the company has 1 million shares outstanding, what is the…
Can you help me answer this with a step by step explanation and display any formulas used.? There is a firm, which we are prospecting as a purchase candidate. It has the following features we find attractive. First, it will enable us to sell to the clients of this firm what we already are selling our existing clients. The revenue addition will be $12 million. However, it will induce $3 million more expenses in attaining that higher level of revenue. Secondly, it will enable us to sell a division of the firm that does not rally connect with our operations for $5 million. Thirdly, since there is a lot of repetition of positions ( we are in the same line of business) we can lay off 50 employees permanently. The average salary of those employees is $60,000. The coc of the firm is 10%. Calculate the amount that we can bid to acquire this company.
THE INFORMATION FOR PROBLEMS 17-20 ARE THE SAME. HOWEVER, EACH QUESTIONS ASKS YOU TO DO SOMETIHNG ELSE WITH THE INFORMATION. Today is December 31, 2018. Today, we started the Hilo Tourism Company. To start the business, the owners have invested $25,000 into the business from their own pocket. In addition, the company borrowed $15,000 at a 10 percent simple interest rate. Thus, the company has $40,000 to work with. The company will use $10,000 of this money for operating cash. The company will use the remaining money to purchase a tourism van for $30,000 on December 31st. The company will pay interest only on the loan. The Hilo Tourism Company will contract our services to Royal Cruise Line who has agreed to pay us $160,000 in the year 2019 for providing tours to high-class customers from the Hilo dock to the Volcano. All sales are cash sales. Hilo Tourism Company will have the following expenses in the year 2019. The van will wear out by $5,000 per year. Insurance will cost $12,000 per…

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