The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%. Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

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Answer 1

Question

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

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No Excel. I need to see the work or I will not understand how the problem is solved. The Schnuz Corporation has a net income of $21 million and 5 million shares outstanding. Its common stock is currently selling for $49 per share. The company plans to sell common stock to set up a new cat food manufacturing plant with a net cost of $23,800,000. The plant will not produce a profit for one year, and then it is expected to earn a 14 percent return on the investment. Chlo Incorporated, an investment banking firm, plans to sell the issue to the public for $45 per share with a spread of 3.5 percent. a. How many shares of stock must be sold to net $23,800,000? (Note: No out-of-pocket costs should be considered in this problem.) b. What are the earnings per share and the price-earnings ratio before the issue (based on a stock price of $49)? What will be the price per share immediately after the sale of stock if the P/E stays constant? c. Compute the EPS and the price (if the P/E stays…

Answer 2

Question

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

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Answer 3

Question

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Answer 6

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Answer 7

Chapter 18, Problem 9PS

A

Summary Introduction

To calculate: The selling price of stock when the current year earnings are to be $2 per share and market capitalization rate is 12%.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Answer 8

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Answer 9

B

Summary Introduction

To calculate: The expected selling price of MF shares in three years is to be determined.

Introduction: The selling price of the share is the value of the share at which it is sold in the market. The stock price can be compared to the intrinsic value by using price earnings ratio. So determination of selling price of the stock is more important.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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

Solution Summary: The author explains that the selling price of MF crop stock is 25, which is a good decision making for money making on stocks.

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