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 $14.00/share and investment banks (indirectly from future business)

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 $14.00/share and investment banks (indirectly from future business)

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 4FPE: The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million...

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On November 7, 2013, Twitter released its initial public offering (IPO) priced at $26 per share. When the day ended, it was priced at $44.90, reportedly making about 1600 people into millionaires in a single day.[20] At the time it was considered a successful IPO. Four years later, Twitter is trading at around $18 per share. Why do you think that occurred? Is Twitter profitable? How can you find out?
The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.
Research online to find a company that bought back shares of its own stock (treasury stock) within the last 6â€“12 months. Why did it repurchase the shares? What happened to the companys stock price immediately after the repurchase and in the months since then? Is there any reason to think the repurchase impacted the price?
For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of 34,894,000, while Staples had a net loss of 210,706,000. OfficeMax had preferred stock of 28,726,000 with preferred dividends of 2,123,000. Staples had no preferred stock. The average outstanding common shares for each company were as follows: a. Determine the earnings per share for each company. Round to the nearest cent. b. Evaluate the relative profitability of the two companies.
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.)
Bon Chance, Inc., has an odd dividend policy. The company has just paid a dividend of $11.00 per share and has announced that it will increase the dividend by $9.00 per share for each of the next four years, and then never pay another dividend. a. If you require a return of 16 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)