FUND CORP FINANCE LL+MYFINLAB >IP<
2nd Edition
ISBN: 9781269932110
Author: Berk
Publisher: PEARSON C
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Chapter 14, Problem 19P
YVR, Inc. just announced a 10 million share SEO at $50 per share. If all of the SEO shares are primary shares and its underwriter charges 7% of the gross proceeds, how much new capital will YVR raise?
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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).)
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Nile plc currently has 6,000,000 ordinary shares in issue, valued at $3 each, and the company has annual earnings equal to 25% of the market value of the shares. A one for four rights issue is proposed, at an issue price of $2.50. If the market continues to value the shares on a price/earnings ratio of 4, what would the value per share be if the new funds are expected to earn, as a percentage of the money raised: a) 20% b) 25% c) 30%
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Chapter 14 Solutions
FUND CORP FINANCE LL+MYFINLAB >IP<
Ch. 14 - Prob. 1CCCh. 14 - Prob. 2CCCh. 14 - Prob. 3CCCh. 14 - Prob. 4CCCh. 14 - Prob. 5CCCh. 14 - Prob. 6CCCh. 14 - Prob. 7CCCh. 14 - Prob. 8CCCh. 14 - Prob. 1CTCh. 14 - What are the advantages and the disadvantages to a...
Ch. 14 - Prob. 3CTCh. 14 - Prob. 4CTCh. 14 - Prob. 5CTCh. 14 - Prob. 6CTCh. 14 - Prob. 7CTCh. 14 - Prob. 8CTCh. 14 - Prob. 9CTCh. 14 - Prob. 10CTCh. 14 - Prob. 11CTCh. 14 - Prob. 1DCCh. 14 - Prob. 2DCCh. 14 - Prob. 3DCCh. 14 - Prob. 4DCCh. 14 - Prob. 5DCCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - 6. Assuming that you own only the Series A...Ch. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - YVR, Inc. just announced a 10 million share SEO at...Ch. 14 - Prob. 20PCh. 14 - Prob. 21PCh. 14 - Prob. 22P
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- Whim's auto has $4,300,000 in retained earnings after which the company will have to issue new shares. Equity consists of 40 perecent in the company's capital structure. After how much additional funding will the firm have to issue new shares?arrow_forwardThe 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?arrow_forwardJasmine Flowers must raise $227 million for its future expansion. To do so, Jasmine expects to issue new common stock. Investment bankers have informed the company the flotation costs will be 5.5 percent of the total amount issued plus $556,000 in additional costs associated with the issue. Jasmine can issue its stock for $40 per share. Determine how many shares Jasmine must sell to net $227 million after flotation costs. Round your answer to the nearest whole number. shares?arrow_forward
- Toady Inc. has 2 million shares outstanding selling at $70 a share. The Company intends to undertake a rights issue that allows 1 share to be purchased for every 5 shares currently held by shareholders for $40 each. If all shareholders take up their entitlement, which one of the following is true? The stock price will fall to $65. The number of shares outstanding will fall to 1.6 million. The firm will raise $13.33 million. The total value of the firm will equal $124 million.arrow_forwardIn previous years, Cox Transport reacquired 4 million treasury shares at $20 per share and, later, 2 million treasury shares at $26 per share. If Cox now sells 2 million treasury shares at $29 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?arrow_forward
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