(1a) What was the total amount of new money raised? (1b) What was the prospective stock price after the issue? (1c) What was the value of the right to buy one new share?
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- 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…On August 19, 2004, Google completed its IPO of 18.5 million shares to the initial investors at $80 per share. The closing price of the stock that same day was $100.00. What was the dollar value of the underpricing associated with the Google IPO? (Round answer to 0 decimal places, e.g. 5,275.)company X has 100 shares outstanding. It earns $2,000 per year perpetually and announces that it will use $1,000 to repurchase its shares in the open market instead of paying dividends. Calculate the number of shares outstanding at the end of year 1, after the first share repurchase, if the required rate of return is 10%. A. 110.0 B. 95.45 C. 100.0 D. 104.55 E. 90.91
- Margoles Publishing recently completed its IPO. The stock was offered at $14.00 per share. On the first day of trading, the stock closed at $19.00 per share. a. What was the initial return on Margoles? b. Who benefited from this underpricing? Who lost, and why? a. What was the initial return on Margoles? The initial return was 1%. (Round to one decimal place.) b. Who benefited from this underpricing? (Select the best choice below.) OA. Owners of other shares outstanding (not part of the IPO) and underwriters. O B. The company and underwriters. O C. Investors who bought shares at the IPO price of $14.00/share and investment banks (indirectly from future business) O D. The company and owners of other shares outstanding (not part of the IPO). Who lost? (Select the best choice below.) 0 A. Owners of other shares outstanding (part of the IPO) O B. Owners of other shares outstanding (not part of the IPO) O C. Both of the above. 0 D. Investors who bought shares at the IPO price of…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]Refer to Figure and look at the listing for Hewlett Packard Enterprise.a. How many shares could you buy for $10,000?b. What would be your annual dividend income from those shares? c. What must be Hewlett Packard Enterprise's earnings per share? d. What was the firm's closing price on the day before the listing?
- A venture capital company buys 400,000 new shares of a start-up’s stock for $6.40 million. If the company has 2.3 million shares outstanding prior to the purchase, what is the company’s pre-money value? What is its post-money value? Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.You purchased some shares in Bandicoots R Us on 19 July 2022, at price $50.58. On 25 December 2022 (159 days later), Bandicoots R Us paid a dividend of $1.50. The price of the shares on 25 December 2022 was $49.60. Finally, on 22 March 2023 (87 days after the dividend), you sold the shares for $48.63. What was your effective annual return over the time you owned Bandicoots R Us? -1.32% -5.67% 2.38% -0.89%1. An investor purchased a stock one year ago for $58.00. It paid an annual cash dividend of $4.38 and is now worth $65.01. What total return did the investor earn? Would the investor have experienced a capital gain? Explain. Review Only Click the icon to see the Worked Solution. The investor would experience (1) in the amount of $ (Choose from the drop-down menu and round to the nearest cent.) The total return earned by the investor is $ (Round to nearest cent.) The total percentage return by the investor %. (Round to two decimal points.) (1) a capital gain a capital loss neither
- A stock is bought for $23.25 and sold for $28.69 a year later, immediately after it has paid a dividend of $4.18. What is the capital gain rate for this transaction? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign. A stock is bought for $29.45 and sold for $35.96 a year later, immediately after it has paid a dividend of $3.97. What is the dividend yield for this transaction? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign. You own a portfolio that has $3,764 invested in Stock A and $7,514 invested in Stock B. If the expected returns on these stocks are 9.33% and 11.67%, respectively, what is the expected return on the portfolio? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign.The Dunn Corporation is planning to pay dividends of $540000. There are 270000 shares outstanding, and earnings per share are $4. The stock should sell for $48 after the ex-dividend date. If, instead of paying a dividend, the firm decides to repurchase stock,a. What should be the repurchase price? b. How many shares should be repurchased? c. What if the repurchase price is set below or above your suggested price in part a? d. If you own 100 shares, would you prefer that the company pay the dividend or repurchase stock? a. 3/10, net 45 b. 3/15 net 30 c. 3/15 net 60 d.2/10 net 45(can you explain how did they solve this: (show full solution and formula) USE THE FOLLOWING INFORMATION FOR THE PROBLEM (1) You decide to sell short 200 shares of XCorp stock at a price of $75. Your margin deposit is 65 percent. Commission on the sale is 1.25%. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25% per year. (1) Suppose at the end of one year XCorp is selling at $90 per share and you cover your short position at this price. What is your rate of return on the investment?(Assume a 1.25% commission on the purchase) -40.64% -25.53% 21% 7% –71.2% Ans: Rate of return = [75-90-0.9375-1.125-1.75- (1-.65)(75)(.0525)]/[(.65)(75)+0.9375] =-40.64% Option a
