Kobe Ltd recently sold 15 million shares in an IPO. The offering price was Sh.25.50, and the floatation cost was `6%. How much cash did the company receive? Select one:
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- Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid short-term investments. IWT’s value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding. Assume that IWT has not yet made the distribution. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT’s intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?In previous years, Cox Transport reacquired 3 million treasury shares at $25 per share and, later, 1 million treasury shares at $29 per share. If Cox now sells 2 million treasury shares at $32 per share and determines cost as the weighted-average cost of treasury shares, by what amount will Cox’s paid-in capital - share repurchase increase? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).)A firm conducting an IPO of common staock sold 1 million new shares in the offering at an offer price of $10 dollars per share. After the offering, the firm had 5 million shares outstanding, and the price of those shares in the secondary market was $12. The Firms IPO was underpriced by?
- Phobis Co is considering a bid for Danoca Co. Both companies are stock-market listed and are in the same business sector. Financial information on Danoca Co, which is shortly to pay its annual dividend, is as follows: Number of ordinary shares 5 million Ordinary share price (ex div basis) $3.30 Earnings per share 40.0c Proposed payout ratio 60% Dividend per share one year ago 23.3c Dividend per share two years ago 22.0c Average sector price/earnings ratio 10 Calculate the market capitalisation of Danoca Co. A $14.75m B $16.50m C $5.00m D $20.00mThe estimated pre-IPO value of equity in thecompany is about $63 million and there are 4million shares of existing shares of stock held byfamily members. The investment bank will chargea 7% spread, which is the difference between theprice the new investor pays and the proceeds tothe company. To net $18.3 million, what is thevalue of stock that must be sold? What is the totalpost-IPO value of equity? What percentage of thisequity will the new investors require? How manyshares will the new investors require? What is theestimated offer price per share?In previous years, Cox Transport reacquired 2 million treasury shares at $20 per share and, later, 1 million treasury shares at $26 per share. By what amount will Cox’s paid-in capital—share repurchase increase if it now sells 1 million treasury shares at $29 per share and determines cost as the weighted-average cost of treasury shares?
- Stump, Inc. issues a $66 million IPO priced at $17 per share, and the offering price to the public is $22 per share. The firm's legal fees, SEC registration fees, and other administrative costs are $350,000. The firm's stock price increases 15 percent on the first day. What is the underpricing spread? $51 million O $15 million O $66 million O $30 millionIn previous years, Cox Transport reacquired 2 million treasury shares at $22 per share and, later, 1 million treasury shares at $28 per share. If Cox now sells 2 million treasury shares at $32 per share and determines cost as the weighted-average cost of treasury shares, by what amount will Cox’s paid-in capital—share repurchase increase?Hughes Technology Corp. recently went public with an initial public offering in which it received a total of $84.35 million in new capital funding. The underwriter used a firm commitment offering in which the offer price was $18.05 and the underwriter’s spread was $1.30. Hughes also paid legal and other administrative costs of $2.75 million for the IPO. Calculate the number of shares issued through this IPO. (Enter your answer in millions. Round your answer to 2 decimal places.)
- On January 20, Metropolitan Inc., sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $40.25 per share. Of the 8 million shares sold, 5 million shares were primary shares being sold by the company, and the remaining 3 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.1% of the gross proceeds as an underwriting fee. a. How much money did Metropolitan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 3.4% on the announcement of the SEO and the new shares were sold at that price, how much money would Metropolitan receive?Miles Co is considering a bid for Stone Co. Both companies are stock-market listed and are in the same business sector. Financial information on Stone Co, which is shortly to pay its annual dividend, is as follows: Number of ordinary shares 5 million Ordinary share price $3.30 Earnings per share 40 cents Proposed payout ratio 60% Dividend per share one year ago 23.3 cents Dividend per share two years ago 22 cents Average sector price/earnings ratio 10 a. Calculate the value of Stone Co using the price/earnings ratio method. b. Using a cost of equity of 13% and a dividend growth rate of 4.5%, calculate the value of Stone Co using the dividend growth model. c. Calculate the market capitalization of Stone Co#2: XYZ Corporation is evaluating an extra dividend versus a share repurchase. In either case, $14,500 would be spent. Current earnings are $1.65 per share, and the stock currently sells for $58 per share. There are 2,000 shares outstanding. a) Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. b) What will the company's EPS and P/E ratio be under the two different scenarios?
