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.
Q: Williams Inc. has a current ratio equal to 3, a quick ratio equal to 2, and total current assets of…
A: We need to use the current ratio and quick ratio below to calculate inventory
Q: Mr. Rich arranged for a mortgage loan for 65 percent of the $2.5 million purchase price of a home.…
A: Compound = Monthly = 12Purchase Price = $2.5 millionMonthly Payment = pmt = $10,400Time = nper = 30…
Q: You plan to deposit $3,000 at the end of each year for three years, starting with the first deposit…
A: When cash is accumulated in a bank account by making an annual contribution at the end of the year…
Q: An investment opportunity promises to pay $5,500.00 per year forever starting ten years from today.…
A: A perpetuity is a tool used in finance to describe a flow of cash into the future that never ends.…
Q: Calculate the present value of the cash flow shown below. Interest rates are 13.00% per year,…
A: The rate of return is 13%.
Q: Suppose you purchase for 34028.07 dollars an annuity that earns 6.8 percent effective. The annuity…
A: The Present Value of Annuity is a financial concept that calculates the current worth of a series of…
Q: Click here to access the TVM Factor Table calculator. Interest = $ Principal = $
A: Loans are paid by monthly payments that are fixed and carry payment for interest and payment for…
Q: Which of the following is True? a. Call option and Put option are identical derivatives contracts…
A: If the buyer of a short call option exercises the right to buy the underlying asset from the seller…
Q: Greta has risk aversion of A=5 when applied to return on wealth over a one-year horizon. She is…
A:
Q: 1. Suppose that the reserve ratio is 0.12 and the currency ratio is 0.3, and there are no excess…
A: To calculate the money supply in each of the scenarios mentioned, use the money multiplier…
Q: If an investor requires a real return of 3% and the average inflation rate is 4%, what is the lowest…
A: Given:Real return = 3% = 0.03Inflation rate = 4% = 0.04
Q: Floyd's corporation has $20,000 in current liabilities and $27,000 in current assets. Its initial…
A: Current ratio is the ratio of current assets and current liabilties and it shows the working capital…
Q: Mikkelson Corporation's stock had a required return of 13.00% last year, when the risk-free rate was…
A: First we need to use CAPM model to calculate beta from equation. Required rate of return = Risk free…
Q: You are thinking of purchasing a house. The house costs $400,000. You have $57,000 in cash that you…
A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…
Q: "You are considering how to invest part of your retirement savings. You have decided to put $100,000…
A: Return of each stock =
Q: 2. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of…
A: Last year sales = $743,000Growth rate = 6%Profit margin = 20%Dividend payout ratio = 30%The firm's…
Q: mon's Hot Chicken purchased its building seven years ago at a price of $139,645. The building could…
A: Fixed assets are those assets which are fixed and not movable and value of these assets decreases…
Q: 5. Based on the interest rates and cash flows shown in the cash flow diagram, determine the value of…
A: NPV calculates the present value of cash inflows minus the present value of cash outflows. The…
Q: Suppose Company A's stock return has a volatility of 50% and its correlation with the Market…
A: The investors benefit from the change in stock price as well as the distributed dividend (periodical…
Q: uppose that Tap Dance, Incorporated's capital structure features 60 percent equity, 40 percent debt,…
A: Weighted average cost of capital (WACC) is the average cost of capital. It can be calculated by…
Q: Assume you can earn 9% per year on your investments. a. If you invest $10,000 for retirement at age…
A: A current asset's future value which is based on an estimated rate of growth is its value at a later…
Q: A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and…
A: Cash Flow for Year 1 = cf1 = $250,000Cash Flow for Year 2 = cf2 = $20,000Cash Flow for Year 3 = cf3…
Q: Given the cash flows below and an interest rate of 3.4%, solve for the FV. Round to the nearest two…
A: Future value (FV) is a financial concept that represents the projected value of a sum of money at a…
Q: Explain the difference between performing the capital budgeting analysis from the parent firm’s…
A: Capital budgeting is defined as the process of analyzing as well as ranking proposed projects for…
Q: Calculate the loan principal.
A: We can determine the loan amount using the formula below:
Q: Future values For the case shown in the following table, calculate the future value of the single…
A: We need to use future value formula below to calculate future value of cash flow…
Q: ach year. At the end of each year for the next 20 years, Chelsea plans to deposit 10% of her nnual…
A: There is a need for proper planning for retirement and if done with planning can have a good life in…
Q: Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects…
A: Enterprises utilize capital budgeting, a financial procedure, to assess and decide which long-term…
Q: Ann obtains a 30-year Interest Only Fixed Rate Mortgage with monthly payments for $1,500,000 at…
A: Compound = Monthly = 12Time = t = 12 * 30 = 360Principal Amount = p = $1,500,000Interest Rate = r =…
Q: You are a shareholder in a corporation. The corporation earns $5 per share before taxes. Once it has…
A: Variables in the question:Earnings before taxes=$5 per shareCorporate tax rate=38%=0.38Personal tax…
Q: An investor owns a bond selling for $5,000. This bond can be converted into 50 shares of stock that…
A: Bond selling price = $ 5000Conversion Ratio = 1 : 50Equity share current price =$ 82
Q: Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The coupon is paid…
A: Compound = 6 months = Semiannually = 2Coupon Rate = 5 / 2 = 2.5%Time = nper = 4 * 2 = 8 Price of…
Q: Variable Name Coupon Payment Semiannual Required Rate of Return Present Value Variable Value Now,…
A: Coupon Payment = Par Value of Bond x Semi Annula Coupon RateSemi-annual requiured rate of return =…
Q: A bond with a face value of 100 pays an annual coupon of 12% and matures on Ad14 August 2007. It…
A: present value" (PV), often referred to as "discounted value," is a financial concept used to…
Q: Hudson Corporation will pay a dividend of $2 pledges to increase its dividend by 6.00 percent per…
A: Dividend Discounting Model (DDM) states that the present value of a stock is dividend in the year 1…
Q: A 6% Transocean bond with annual coupon payments and a $1,000 par value has 12 years to maturity. If…
A: The present value of a bond is the discounted value of the future interest payment and discounted…
Q: Pete Morton is planning to go to graduate school in a program of study that will take three years.…
A: Here,Present value of Annuity:It represents the current worth of the future cash flow stream of the…
Q: Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance…
A: As per the given information:
Q: Using the information from the prior problem, what rate (in %s) do you expect a 5-year bond to have?…
A: Securities that provide constant cash flow at a timed interval in the form of coupons and belong to…
Q: Imagine an emerging market with only 15 years of data. Compute the historical ERP using the…
A: Variables in the question:…
Q: ia Ma purchased a condominium 5 years ago for $160,000, paying $1,174.75 per month on her $146,000,…
A: To determine whether Jia Ma should refinance her mortgage under the specified terms, we need to…
Q: f you would like to retire as a millionaire. If you make a uniform deposit of $19,000 monthly at an…
A: Millionaire means that you want one million in retirement and the future value of the deposit…
Q: The future worth in year 8 for the cash flows shown is $38,000. At an interest rate of 7% per year,…
A: Future worth is also called future value. Future value means the value of a quantity of money or…
Q: What is the capital gain you will earn if you buy a bond that has 15 years to maturity, pays a…
A: Considering the face value of bond = $1,000Calculation of bond price:Formula used:
Q: You are scheduled to receive $45,000 in two years. When you receive it, you will invest it for 8…
A: Amount After 3 Years = a = $45,000Time = t = 8 YearsInterest Rate = r = 6%
Q: Calculate the EFN for 15, 20 and 45 percent growth rates. (A negative answer should be indicated by…
A: First I'm going to list the formula and then solve them in excel. In the formula above G% = growth %…
Q: Marcus is considering a purchase of a new Toyota that costs $20,000 at a local dealership. Marcus…
A: Purchase cost of Car= $ 20000Annual uses cost of Car = $ 1500Selling price of car = $ 10000Life of…
Q: You will deposit $5,000 today. It will grow for 9 years at 12% interest compounded semiannually. You…
A: A regular, periodic contribution of money or funds that is made once a year, often on an annual…
Q: Find the duration of a 9.0% coupon bond making semiannually coupon payments i maturity of 9.0%. What…
A: Duration of bond shows the weighted period required to receive all cash flow from the bond and is…
Q: In 1898, the first Green Jacket Golf Championship was held. The winner's prize money was $230. In…
A: The rate of increase refers to the annual rate by which the value of the investment increases on…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- The Elkmont Corporation needs to raise $52.2 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. The offer price is $38 per share and the company’s underwriters charge a spread of 7 percent. How many shares need to be sold? Note: Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.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 6%, how many shares will the company need to issue in order to be left with net proceeds (before other administrative costs) of $4 million ? (Do not round intermediate calculations. Round your answer to the nearest whole number.) b. If the under writing spread is 6% and the other administrative costs are $85,000, what is the dollar value of the total direct costs of the issue? (Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) c. If the share price falls by 4% at the announcement of the plans to proceed with a seasoned offering, what is the dollar cost of the announcement effect? (Enter your answer in dollars not in millions.)Young Corporation stock currently sells for $32 per share. There are one million shares currently outstanding. The company announces plans to raise $5 million by offering shares to the public at a price of $32 per share. a. If the underwriting spread is 5%, how many shares will the company need to issue in order to be left with net proceeds of $5 million? (Round your answer to the nearest whole.) Number of shares b. If other administrative costs are $61,000, what is the dollar value of the total direct costs of the issue? (Round your answer to the nearest dollar.) Dollar value of total direct costs $ c. If the share price falls by 3% at the announcement of the plans to proceed with a seasoned offering, what is the dollar cost of the announcement effect? (Round your answer to the nearest dollar.) Dollar value of total direct costs $
- Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $19.55 per share for 580,000 shares. The company will receive $17.90 per share and will incur $165,000 in registration, accounting, and printing fees. a-1. What is the spread on this issue in percentage terms? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Spread a-2. What are the total expenses of the issue as a percentage of total value (at retail)? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expenditure percentage % b. If the firm wanted to net $20.42 million from this issue, how many shares must be sold? (Do not round intermediate calculations. Enter your answer rounded to the nearest whole number.) SharesThe Meadows Corporation needs to raise $52 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 $45 per share and the company's underwriters charge a spread of 7 percent, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.) Number of shares offeredThe Elkmont Corporation needs to raise $67.9 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. The offer price is $23 per share and the company's underwriters charge a spread of 7.5 percent. How many shares need to be sold? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. Number of shares offered
- The Scandrick Corporation needs to raise $42 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. The offer price is $40 per share and the company's underwriters charge a spread of 6 percent. If the SEC filing fee and associated administrative expenses of the offering are $625,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.)Pandora Box Company Inc. makes a rights issue at a subscription price of $5 a share. One new share can be purchased for every five shares held. Before the issue there were 15 million shares outstanding and the share price was $12. a. What is the total amount of new money raised? (Do not round intermediate calculations. Enter your answer in millions.) b. What is the expected stock price after the rights are issued? (Enter your answer rounded to 4 decimal places.) c. By what percentage would the total value of the company need to fall before shareholders would be unwilling to take up their rights? (Do not round intermediate calculations. Enter your answer as a positive percent rounded to 2 decimal places.) d. Suppose that you initially own 100 shares plus $100 in the bank. If you take up your rights issue, what will be your total wealth after the issue is completed? (Do not round intermediate calculations. Enter your answer rounded to nearest whole dollar.) e. Suppose that the company…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 round intermediate calculations and round your answer to nearest whole number, e.g., 1,234,567.) Number of shares offered 3,133,641
- Suppose that you just purchased 250 shares of Beta Banana's stock for $70 per share. The initial margin requirement is 70.0%, which means the amount borrowed is $5,250. The corresponding balance sheet is below: Liabilities and Equity Stock Total assets Margin percentage Assets Required: a. Now suppose the price of the stock falls to $41 per share. What is your current margin percentage? (Round your answer to 2 decimal places.) b. Construct the balance sheet to show the current situation. Stock Total assets $ 17,500.00 $ 17,500.00 c. If the maintenance margin is 50%, at what stock price would you get a margin call? (Round your answer to 2 decimal places.) Price Loan from broker. Equity Total liabilities and equity Assets % $ 5,250.00 $ 12,250.00 $ 17,500.00 Liabilities and Equity Loan from broker Equity Total liabilities and equityThe Meadows Corporation needs to raise $70 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 $30 per share and the company’s underwriters charge a spread of 8 percent, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions, rounded to the nearest whole number, e.g., 1,234,567.)You've borrowed $27,950 on margin to buy shares in Ixnay, which is now selling at $43.0 per share. You invest 1,300 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%, Two days later, the stock price changes to $50 per share. Required: a. Will you receive a margin call? O Yes O No b. At what price will you receive a margin call? (Round your answer to 2 decimal places.) Stock price