The Whistling Straits Corporation needs to raise $60 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $21 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold? (Do not
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- Borg Security Systems is considering the sale of 12,000 shares of stock to finance development of a new security product. The firm has 40,000 shares of common stock outstanding, par value of $1.00 per share. The firm has $60,000 in additional paid-in capital and $80,000 in retained earnings. Borg's investment bankers estimate that new shares will bring in $5.15 per share. If Borg goes ahead with the new stock issue, what will be the change in book value per share? Group of answer choices −$1.00 +$0.15 +$0.56 +$1.00 $0Iron Corporation is evaluating an extra dividend versus a share repurchase. In either case, $18,000 would be spent. Current earnings are $2.00 per share, and the stock currently sells for $50 per share. There are 4,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Price per share Shareholder wealth b. EPS PE ratio Extra dividend RepurchaseWuttke Corp. wants to raise $4.8 million via a rights offering. The company currently has 580,000 shares of common stock outstanding that sell for $85 per share. Its underwriter has set a subscription price of $40 per share and will charge the company a spread of 6 percent. If you currently own 2,500 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? Please answer fast I give you upvote.
- Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang’s current value of equity is $60 million. Zang currently has 4 million shares outstanding and will issue 1 million new shares. ESM charges a 7% spread. What is the correctly valued offer price, rounded to the nearest penny? How much cash will Zang raise net of the spread (use the rounded offer price)?The Optical World Corporation, a manufacturerof peripheral vision storage systems, needs $10 million to market its new robotics-based vision systems.The firm is considering two financing options: common stock and bonds. If the firm decides to raise thecapital through issuing common stock, the flotationcosts will be 6%, and the share price will be $25. Ifthe firm decides to use debt financing, it can sell a10-year, 12% bond with a par value of $1,000. Thebond flotation costs will be 1.9%.(a) For equity financing, determine the flotationcosts and the number of shares to be sold to net$10 million.(b) For debt financing, determine the flotation costsand the number of $1,000 par value bonds tobe sold to net $10 million. What is the requiredannual interest payment?Transco is considering acquiring Tenco. Tenco's current stock price is $23. What is the maximum price per share that Transco should offer based on the following data for Tenco: PV of future cash flows $200 million, 20 million outstanding shares, no debt, and discount rate of 12%?
- Rally inc, is an all equity firm with assets worth $25B and 10B shares outstanding. Rally plans to borrow $10B and use funds to repurchase shares. Rally’s corporate tax rate is 35% and Rally plans to keep its outstanding debt equal to $10B permanently. Suppose Rally offers $3 per share, and shareholders tender their shares at this price. What will be Rally’s share price after the repurchase?Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $55 per share. Its underwriter has set a subscription price of $30 per share and will charge the company a spread of 6 percent. If you currently own 5,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Sale proceedsLabrador technologies Inc. plans to become public soon. The current owners would like to know the value of each share of common equity so they price their shares correctly for potential investors. The WACC for this firm is 10.46% and there are 63,314 common shares outstanding. The firm has outstanding debt with a market value of $2,840,088 and has no preferred equity. Use the DCF valuation model based on the expected FCFs shown below; year 1 represents one year from today and so on. The company expects to grow at a 2.8% rate after Year 5. Rounding to the nearest penny, what is the value of each share of common stock? Period Free Cash Flow Year 1 $1,004,648 Year 2 $1,442,144 Year 3 $1,311,927 Year 4 $2,319,814 Year 5 $2,598,958
- Jenny Corporation needs to raise $46 million to fund a new project. The company will sell shares at a price of $27.60 in a general cash offer and the company's underwriters will charge a spread of 6.5 percent. The direct flotation costs associated with the issue are $575,000. How many shares need to be sold? Multiple Choice 1,666,667 shares 1,804,813 shares 1,735,740 shares 1,564,945 shares 1,615,806 sharesHoobastink Mfg. is considering a rights offer. The company has determined that the ex- rights price will be $61. The current price is $68 per share, and there are 10 million shares outstanding. The rights offer would raise a total of $60 million. What is the subscription price?Sunnyfax Publishing pays out all its earnings and has a share price of $37.00. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 14%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision? O $45.87 $40.14 $68.81 $57.34 Suppose a ten-year, $1,000 bond with an 8.6% coupon rate and semiannual coupons is trading for $1,035.39. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? 8.08% O4.04% O 5.36% O 10.72%