Fundamentals Of Corporate Finance, 9th Edition
9th Edition
ISBN: 9781260052220
Author: Richard Brealey; Stewart Myers; Alan Marcus
Publisher: McGraw-Hill Education
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Chapter 15, Problem 12QP
a.
Summary Introduction
To compute: The percentage underwriting spread.
b.
Summary Introduction
To compute: The capital raised by the company after its expenses.
c.
Summary Introduction
To compute: The cost of under pricing.
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Students have asked these similar questions
Publishing recently completed its IPO. The stock was offered at
$14.76
per share. On the first day of trading, the stock closed at
$18.33
per share.
a. What was the initial return on
Felton?
b. Who benefited from this underpricing? Who lost, and why?
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…
Requirement:
Use the 2015 data for Prince Company. Assume a stock price of $28 per share. Compute the ratios.
Prince Company paid $7,000 out in dividends for the year. Show how you can figure out that the company paid $7,000 out in dividends for the year.
2015
2014
Income Statement
Sales revenue
190,000
167,000
Cost of goods sold
112,000
100,000
Gross profit
78,000
67,000
Operating expenses and interest expenses
56,000
53,000
Pretax income
22,000
14,000
Income tax
8,000
4,000
Net income
14,000
10,000
Balance Sheet
Cash
4,000
7,000
Accounts receivable (net)
14,000
18,000
Inventory
40,000
34,000
Operational assets (net)
45,000
38,000
Total assets
103,000
97,000
Current liabilities (no interest)
16,000
17,000
Long-term liabilities (10% interest)
45,000
45,000
Common stock (par $5)
30,000…
Chapter 15 Solutions
Fundamentals Of Corporate Finance, 9th Edition
Ch. 15 - Prob. 1QPCh. 15 - Prob. 2QPCh. 15 - Prob. 3QPCh. 15 - Prob. 4QPCh. 15 - Prob. 5QPCh. 15 - Prob. 7QPCh. 15 - Prob. 8QPCh. 15 - Prob. 9QPCh. 15 - Prob. 10QPCh. 15 - Prob. 11QP
Ch. 15 - Prob. 12QPCh. 15 - Prob. 13QPCh. 15 - Prob. 14QPCh. 15 - Prob. 15QPCh. 15 - Prob. 16QPCh. 15 - Prob. 17QPCh. 15 - Prob. 18QPCh. 15 - Prob. 19QPCh. 15 - Prob. 20QPCh. 15 - Prob. 21QPCh. 15 - Prob. 22QPCh. 15 - Prob. 23QPCh. 15 - Prob. 24QPCh. 15 - Prob. 25QPCh. 15 - Prob. 26QPCh. 15 - Prob. 27QP
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