Dura Electric Batteries Ltd., a start-up in 2017, in which Mico Insurance Company Ltd. invested 100 Cr. to take 25% ownership stakes in 2019, and SBL Bank Ltd. invested 150 Cr to take 20% ownership stakes in 2020, is now planning to come out with IPO in May 2022 and likely to become a Unicorn Company. Mr. Y appointed as an advisor and his job is to define the role of Institutional Investors to create a benchmark company in Electric Batteries Industry in good governance, keeping in mind interest of investors and other stakeholders. Explain the role of institutional investors from the lens of corporate governance.
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Dura Electric Batteries Ltd., a start-up in 2017, in which Mico Insurance Company Ltd. invested 100 Cr. to take 25% ownership stakes in 2019, and SBL Bank Ltd. invested 150 Cr to take 20% ownership stakes in 2020, is now planning to come out with IPO in May 2022 and likely to become a Unicorn Company.
Mr. Y appointed as an advisor and his job is to define the role of Institutional Investors to create a benchmark company in Electric Batteries Industry in good governance, keeping in mind interest of investors and other stakeholders. Explain the role of institutional investors from the lens of corporate governance.
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- The Trinidad and Tobago NGL Limited (NGL), is one of the stocks listed in the Energy Sector on the local stock exchange. The company’s initial public offering (IPO) was in October 2015 and the company was listed for the first time on October 19, 2015; at an opening price of $20.00. Required: If an investor purchased shares in the IPO at $20.00, would this investor have experienced a capital gain or loss if he/she decided to sell the stock on June 25, 2021. When did this share trade at its highest price since its IPO? What was this price? If an investor who purchased shares at the IPO, sold his holdings on this day, what would have been his capital gain/loss? Based on your analysis in parts i) and ii), what do you garner about investing in the stock market? If an investor held NGL shares since its IPO, what is the total dividends per share that he/she would have received to date? Provide details by payment date. Date Open Close Change Change % Volume Traded June 25th 2021 18.17…Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $1,746,400 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 23,600 shares in the company and the two entrepreneurs will have combined holdings of 35,400 shares. a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.) b. What value is the venture capitalist placing on each share?Weaver Plus is a company listed on the New York Stock Exchange market. Extracts from its current statement of financial position are as follows: $’m $’m Equity Ordinary shares (K1 nominal) 15 Reserves 153 168 Non-current liabilities 8% Irredeemable loan notes 10 6% Loan notes 12 22 190 Weaver Plus is planning on expansion of its existing business line and locations costing $10 million in the near future and is assessing its current financial position as part of preparing a business case in support of seeking new finance. The business expansion is expected to increase the profit before interest and tax of Weaver Plus by 20% in the first year. The planned business expansion by Weaver Plus has already been announced to the stock market. Information on the expected increase in profit before interest and tax has not yet been announced and the company has not decided on how the expansion is to be…
- You have been hired as a financial analyst in a consulting firm which primary deals with financial institutions to provide services related to mergers and acquisitions of businesses.As your first project you have been teamed up with a division in your company which specialize in investment appraisals and currently have following tasks in hand: ⦁ Fintech corporation (a long term client) need advice based on higher dividend payout as it is considering to invest in stocks and have following couple of options: RUBIK LLC : Share is currently trading at $56 with expected growth rate of 6% , whereas investor’s required rate of return is 9 % . WOODWORKS LLC : Share is currently trading at $23 with expected growth rate of 2.5% , whereas investor’s required rate of return is 9 % (same as above). You are expected to calculate dividend per share by Divided Growth Model for RUBIK and WOODWORKS.Early in 2020, Mr. Karim, the chief financial officer for Sneaker Manufacturing, was given the task of assessing the impact of a proposed risky investment on the firm’s stock value. To perform the necessary analysis, Mr. Karim gathered the following information on the firm’s stock. During the immediate past 5 years (2015–2019), the annual dividends paid on the firm’scommon stock were as follows:Year Dividend per share2019 Tk. 1.902018 1.702017 1.552016 1.402015 1.30 The firm expects that without the proposed investment, the dividend in 2020 will be Tk. 2.09 pershare and the historical annual rate of growth (rounded to the nearest whole percent) willcontinue in the future. Currently, the required return on the common stock is 14%. Karim’sresearch indicates that if the proposed investment is undertaken, the 2020 dividend will rise toTk. 2.15 per share and the annual rate of dividend growth will…A privately held corporation, is making plans for future investments that can increase growth. The company’s manager has recommended that the company “go public” by issuing common stock to raise the funds needed to support the growth. The current owners, who founded the firm, are worried that control of the firm will be diluted by this strategy. If the company undertakes an IPO, it is estimated that each share of stock will sell for $6.25, the investment banking fee will be 22 percent of the total value of the issue. If the founders must issue stock to finance the growth of the firm, what would you recommend they do to protect their controlling interest for at least a few years after the IPO?
- A privately held corporation, is making plans for future investments that can increase growth. The company’s manager has recommended that the company “go public” by issuing common stock to raise the funds needed to support the growth. The current owners, who founded the firm, are worried that control of the firm will be diluted by this strategy. If the company undertakes an IPO, it is estimated that each share of stock will sell for $6.25, the investment banking fee will be 22 percent of the total value of the issue. The founders now hold all of the company’s stock: 8 million shares. If the company issues 8 million shares, what proportion of the stock will the founders own after the IPO?Alex Morgan LLC's Chief Financial Officer, Mackenzie Dern, analyzed one of Morgan's competitors. She found that the competitor had Average Invested Capital of $600,000 in 2021. She said the Company had FCFF of $50,000; FCFE of $40,000; and that their WACC was 10.0%. She asked you what their EVA would be?Bluesky.com, which currently is a privately held corporation, is making plans for future growth. The company’s financial manager has recommended that Bluesky“go public” by issuing common stock to raise the funds needed to support thegrowth. The current owners, who are the founders of the company, are concernedthat control of the firm will be diluted by this strategy. If Bluesky undertakes anIPO, it is estimated that each share of stock will sell for $5, the investment bankingfee will be 15 percent of the total value of the issue, and the costs to the companyfor items such as lawyer fees, printing stock certificates, SEC registration, and so onwill be approximately 1 percent of the total value of the issue.a. If the market value of the stock issue is $42 million, how much will Blueskybe able to use for growth?b. How many shares of stock will Bluesky have to issue if it needs to net$42 million for growth?c. The founders now hold all of the company’s stock—10 million shares. If thecompany…
- In business, the capital factor is the pivotal part and the capital structure must be followed as per the law. In accordance with Oman Commercial Companies Law, Star Win SAOG Registered its capital of OMR 6,000,000 which was divided into 6,000,000 shares of OMR 1 each. The company had an issue of paid-up capital OMR 3 million with no arrears. In the year 2021, the company came up with an IPO of 2 million shares. The company received an application for 2.5 million shares. The company finalized the allotment on 2,000,000 shares and rejected the excess applications. The business called up 80% of its face value amount for the allotted shares. The company received entire call amount except for 5000 shares, the shareholders who failed to pay the call money. Evaluate this situation of the above company, Calculate the amount of different categories of share capital and prepare the abstract of SFOP by showing only Share capital for the year 2021.Lana is thinking about making an iventment in a new venture called BluePearl - after performing an analysis of similar firms, she discovered several other firms (3) with the following Enterprise Value to FCF ratios: Firm 1: 5.9 Firm 2: 7.6 Firm 3: 9.1 The cashflows for BluePearl this year are expected to be $1,300,000. If BluePearl doesn't have any debt or cash currently, and 700,000 shares outstanding - what is the Price Per Share for BluePearl?A group of investors is planning to set up a new company. To help determine the new company’s financial requirements, the president has asked you to construct a pro forma balance sheet for 31 December 2019, the end of the first year of operations, and to estimate the company’s external financing requirements for 2019. Sales for 2019 are projected at $25 million, and the following are industry average ratios for similar companies: Sales to common equity (S/E) 5 times Current debt to equity (CL/E) 50% Total debt to equity (D/E) 80% Current ratio (CA/CL) 2.2 times Sales to inventory (S/Inv) 9 times Accounts receivable to sales ((A/R)/S) 10% Fixed assets to equity (FA/E) 70% Profit margin (NIAT/S) 5% Dividend payout ratio (DIV/NIAT) 30% a. Complete the pro forma balance sheet below, assuming that 2019 sales are $25 million and that the firm maintains industry average ratios b. What would be the amount of equity financing that must be supplied by the investors?