Young Corporation stock currently sells for $20 per share. There are 1 million shares currently outstanding. The company announces plans to raise $4 million by offering shares to the public at a price of $20 per share. a. If the underwriting spread is 8%, how many shares will the company need to issue in order to be left with net proceeds (before other administrative costs) of $4 million? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Number of shares 217,391 b. If the under writing spread is 8% and the other administrative costs are $45,000, what is the dollar value of the total direct costs of the issue? Note: Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.

Young Corporation stock currently sells for $20 per share. There are 1 million shares currently outstanding. The company announces plans to raise $4 million by offering shares to the public at a price of $20 per share. a. If the underwriting spread is 8%, how many shares will the company need to issue in order to be left with net proceeds (before other administrative costs) of $4 million? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Number of shares 217,391 b. If the under writing spread is 8% and the other administrative costs are $45,000, what is the dollar value of the total direct costs of the issue? Note: Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.

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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A firm goes public. The firm receives $35 for each of the 7.75 million shares sold. The initial offering price was $37 per share, and the stock rose to $38.25 per share is the first few minutes of trading. The firm paid $2,085,000 in direct legal and other costs and $833,000 in indirect cost. What were the underwrites spread of this offer?
Katie Homes and Garden Co. has 13,700,000 shares outstanding. The stock is currently selling at $60 per share. If an unfriendly outside group acquired 20 percent of the shares, existing stockholders will be able to buy new shares at 25 percent below the currently existing stock price. a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect? (Do not round intermediate calculations.) Number of shares b. What will be the new purchase price for the existing stockholders? (Do not round intermediate calculations. Round your answer to 2 decimal places.) New purchase price S
Caspian Water needs to raise $59.00 million by issuing additional shares of stock. If the market estimates Caspian Water will pay a dividend of $2.12 next year (D1 2.12), which will grow at 3.99% forever and the cost of equity to be 12.82%then how many shares of stock must the firm sell? 1 ) None of the answers in this list is within 100 shares of the correct answer 2) 312,890 3) 2,457,406 4 ) 4,128,970 5 ) 915,939 6 ) 2.975,934
Raghubhai
Sleeping Bear Travel, Incorporated, is trying to decide between the following two alternatives to finance its new $24 million gaming center: Issue $24 million, 5% note. Issue 1 million shares of common stock for $24 per share with expected annual dividends of $1.20 per share. Required: 1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. 2. Answer the following questions for the current year: (a) By how much are interest payments higher if issuing the note?(b) By how much are dividend payments higher by issuing stock?(c) Which alternative results in higher earnings per share?
Please answer is 24840, only post if your answer comes this with explanation and concept. Thabks!
Skyler Industries's preferred stock currently sells for $43 per share. The stock pays an annual dividend of $2.95 per share. The cost of preferred stock, Rp, is ____%. Round your final answer to 2 decimal places (example: enter 12.34 for 12.34%), but do not round any intermediate work in the process. [Note: Correct answer feedback may show more than 2 decimal places, but you should still follow instructions above for entering your answers.]
You have a margin account and deposit Rs.90,000. Assuming the prevailing marginrequirement is 20%, commissions are ignored and D.G.K Cement stock is selling atRs.55 per share while Askari Cement stock is selling at Rs. 85 per share. You invest 40%of your investment in D.G.K cement while remaining is deposited in Askari cement.a. How many shares of each stock can you purchase using the maximum allowablemargin if you invest in both?b. What is your total and percentage profit (loss) if:1. the price of D.G.K Cement Rises to Rs.65 per share while Askari Cement stockrises to Rs. 97 per share?2. the price of D.G.K Cement reduces to Rs.42 per share while Askari Cementstock reduces to Rs. 76 per share?c. If you invest all money in D.G.K cement ONLY and the maintenance margin is 25%,to what price can D.G.K Cement stock fall before you will receive a margin call?d. If you invest all money in Askari cement ONLY and the maintenance margin is 25%,to what price can Askari cement stock fall before you…
Beets Inc had 10m shares outstanding that were trading at $5. In 2020 it received a profit that was $4m higher than expected. It announced that it will use $1.25m to buy back shares. How many shares would be left in circulation after the repurchase program is complete? [enter your answer in M of shares, with 2 decimal places precision]
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 proceeds
Having heard about IPO underpricing, I put in an order to my broker for 1, 120 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO Shares Allocated to Me Price per Share Initial Return A 620 $ 10 6 % В 320 20 14 C 1, 1208-3D0 12 23 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue.
Bernard Corporation wants to obtain P4 million in its first public issue of common stock. After the issuance, the total market value of a stock is estimated at $10 million. At present, there are 120,000 closely-held shares. REQUIREMENTS: (a) What is the amount of new shares that must be issued to obtain the P4 million? (b) After the stock issuance, what will be the expected price per share?

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