Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
Question
Book Icon
Chapter 18, Problem 6SP

a.

Summary Introduction

To calculate:

Intrinsic stock price per share before IPO

b.

Summary Introduction

To calculate:

Gross proceeds

c.

Summary Introduction

To calculate:

Total value after IPO and percentage of the total post-IPO value required by new shareholders

d.

Summary Introduction

To calculate:

Number of new shares and total shares outstanding after the IPO

e.

Summary Introduction

To calculate:

Offer price per share

f.

Summary Introduction

To calculate:

Price per share after IPO

f.

Summary Introduction

To calculate:

Price per share after IPO

Blurred answer
Students have asked these similar questions
Your PE firm is considering acquiring a publicly traded digital advertising company, Star Dust Enterprises (SDE). The following are some key statistics of the stock of SDE today (t = 0). SDE is 100% equity financed. Its cost of capital (apply this to all cash flows) is 11.2% and the payout ratio is 79%. Expected earnings per share of SDE at next year (t = 1) are $6.6. Assume that without new investments, expected earnings of SDE would remain at their time-1 level in perpetuity. All future investments are expected to generate $0.2 in incremental earnings for each $1 of investment. For an investment made at time t, incremental cash flows are generated starting in year t + 1. (a) Compute expected dividend per share of SDE next year (t = 1): $ (b) Compute expected dividend per share of SDE two years from now (t = 2): $ (c) What is the present value of growth opportunities (PVGO) of SDE today? $
Your firm is planning to invest in a new electrostatic power generation system. Ampthill Inc is a firm that specializes in this business. Ampthill has a stock price of $25 per share with 20 million shares outstanding. Ampthill's equity beta is 1.4. It also has $220 million in debt outstanding with a debt beta of 0.1. Your estimate of the asset beta for electrostatic power generators is closest to       1.18     1     0.79     1.3
Morgan Industries is an all-equity firm with 50 million shares outstanding. Iota has $200 million in cash and expects future free cash flows of $75 million per year. Management plans to use the cash to expand the firm's operations, which in turn will increase future free cash flows by 12%. Morgan's cost of capital is 10% and assume that capital markets are perfect. •    What is the value of Morgan Industries if they use the $200 million to expand?•    What is the price per share of Morgan Industries if they use the $200 million to expand?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage
Text book image
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Corporate Fin Focused Approach
Finance
ISBN:9781285660516
Author:EHRHARDT
Publisher:Cengage