FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Question
Chapter 15, Problem 14P
a.
Summary Introduction
To calculate: The spread on the issue of Winston Sporting Goods in percentage and the total expense as a percentage for this issue.
Introduction:
Underwriting:
These are the services that are provided by either an individual or a financial institution of undertaking the risk that is associated with the investments involved in a venture for a premium or fee.
b.
Summary Introduction
To determine: The number of shares that are needed to be sold to net $15.99 from this issue.
Introduction:
Underwriting:
These are the services that are provided by either an individual or a financial institution of undertaking the risk that is associated with the investments involved in a venture for a premium or fee.
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Students have asked these similar questions
Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the
retail price will be $19.55 per share for 580,000 shares. The company will receive $17.90 per share and will incur $165,000 in
registration, accounting, and printing fees.
a-1. What is the spread on this issue in percentage terms? (Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.)
Spread
a-2. What are the total expenses of the issue as a percentage of total value (at retail)? (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places.)
Expenditure percentage
%
b. If the firm wanted to net $20.42 million from this issue, how many shares must be sold? (Do not round intermediate calculations.
Enter your answer rounded to the nearest whole number.)
Shares
The Dahlia Flower Company has earnings of $1.48 per share.
a. If the benchmark PE for the company is 15, how much will you pay for the stock?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. If the benchmark PE for the company is 18, how much will you pay for the stock?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
a. Stock price
b. Stock price
A firm desires to sell stock to the public. The underwriter charges $0.4 million in fees and offers to buy six million shares from the firm at a price of $30 per share. In addition, registration and audit fees total $120,000, and marketing and miscellaneous fees add up to another $65,000. The underwriter expects to earn gross proceeds per share of $36.
a) What is the issuing firm's out-of-pocket dollar transaction cost to issue the stock?
b) Immediately after the stock was issued, the stock price rose to $38. What is the issuing firm's opportunity cost?
c) What is the total issuance cost, including opportunity costs, as a percentage of the total funds available to the issuing firm?
Chapter 15 Solutions
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
Ch. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Prob. 5DQCh. 15 - Prob. 6DQCh. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQ
Ch. 15 - What is privatization? (LO15-5)Ch. 15 - Louisiana Timber Company currently has 5 million...Ch. 15 - The Hamilton Corporation Company has 4 million...Ch. 15 - American Health Systems currently has 6,400,000...Ch. 15 - Using the information in Problem 3, assume that...Ch. 15 - Jordan Broadcasting Company is going public at 50...Ch. 15 - Prob. 6PCh. 15 - Tiger Golf Supplies has 25 million in earnings...Ch. 15 - Prob. 8PCh. 15 - Walton and Company is the managing investment...Ch. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Midland Corporation has a net income of 19...Ch. 15 - Prob. 19PCh. 15 - Prob. 20PCh. 15 - Prob. 21PCh. 15 - Prob. 22P
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