The shares owned by Dean Smith after reverse stock split. Introduction: Reverse Stock Split: A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

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Answer 1

Question

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

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Dani Corporation has 3.4 million shares of common stock outstanding. The current share price is $84.50, and the book value per share is $8.75. The company also has two bond issues outstanding. The first bond issue has a face value of $71 million, a coupon rate of 5.1 percent, and sells for 95.5 percent of par. The second issue has a face value of $43 million, a coupon rate of 5.7 percent and sells for 104.5 percent of par. The first issue matures in 21 years, the second in 9 years. The most recent dividend was $3.98 a the dividend growth rate is 4.1 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company's cost of equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Cost of equity % What is the company's aftertax cost of debt? Note: Do not round intermediate…

Answer 2

Question

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 6

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 7

Chapter 18, Problem 20P

a.

Summary Introduction

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 8

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 9

b.

Summary Introduction

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 10

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 11

c.

Summary Introduction

To calculate: The actual price of the stock on the basis of the assumption that stock would go up, but only up to 80% of the value computed in part (b).

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 12

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 13

d.

Summary Introduction

To calculate: The change in the value of the holdings of Dean Smith from before the reverse stock split to after it.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 18 - Prob. 1DQ Ch. 18 - Prob. 2DQ Ch. 18 - Prob. 3DQ Ch. 18 - Prob. 4DQ Ch. 18 - Prob. 5DQ Ch. 18 - Prob. 6DQ Ch. 18 - Prob. 7DQ Ch. 18 - Prob. 8DQ Ch. 18 - Prob. 9DQ Ch. 18 - Prob. 10DQ

The shares owned by Dean Smith after reverse stock split. Introduction: Reverse Stock Split: A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Solution Summary: The author explains how to calculate the shares owned by Dean Smith after reverse stock split.

Videos

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Want to see the full answer?

Chapter 18 Solutions

The shares owned by Dean Smith after reverse stock split. Introduction: Reverse Stock Split: A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Solution Summary: The author explains how to calculate the shares owned by Dean Smith after reverse stock split.

Videos

To calculate: The shares owned by Dean Smith after reverse stock split. Introduction: Reverse Stock Split: A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

To calculate: The anticipated stock price post reverse stock split. Introduction: Reverse Stock Split: A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

Want to see the full answer?

Chapter 18 Solutions

To calculate: The shares owned by Dean Smith after reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.

To calculate: The anticipated stock price post reverse stock split.

Introduction:

Reverse Stock Split:

A corporate procedure through which the management of a company consolidates its current shares to decrease the number of shares outstanding is termed as reverse stock split or stock merge.