BUS 225 DAYONE LL
17th Edition
ISBN: 9781264116430
Author: BLOCK
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 15, Problem 5P
Jordan Broadcasting Company is going public at
a. What is the immediate dilution based on the new corporate shares that are being offered?
b. If the stock has a P/E of 30 immediately after the offering, what will the stock price be?
c. Should the founding stockholders be pleased with the
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Students have asked these similar questions
Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has one million shares outstanding and earnings of $6 million before recording the new issue. What is the amount of dilution in earnings per share?
Jordan Broadcasting Company is going public at $47 net per share to the company. There also are founding stockholders that are
selling part of their shares at the same price. Prior to the offering, the firm had $31 million in earnings divided over 8 million shares. The
public offering will be for 4 million shares; 2 million will be new corporate shares and 2 million will be shares currently owned by the
founding stockholders.
a. What is the immediate dilution based on the new corporate shares that are being offered? (Do not round intermediate calculations
and round your answer to 2 decimal places.)
Dilution
b. If the stock has a P/E of 20 immediately after the offering, what will the stock price be? (Do not round intermediate calculations
and round your answer to 2 decimal places.)
5
Stock price
per share
c. Should the founding stockholders be pleased with the $47 they received for their shares?
Ⓒ Yes
O No
MASSASINSHER
SoFi Technologies Inc. (SOFI) currently has 13 million shares of common stock outstanding and is selling for $215 a share. The company is planning to conduct a 5-for-1 stock split.
If SOFI declares a 5-for-1 stock split, what will the price of the company’s stock be after the split—assuming that the total value of the firm’s stock remains the same before and after the split?
How many shares of SOFI will be outstanding?
Now imagine of instead of performing a stock split, SOFI decides to pay a stock dividend. If SOFI declares a 5.5% stock dividend, how many shares will the firm issue to existing shareholders?
Now, in lieu of conducting a stock split or declaring a stock dividend, SOFI decides to buyback 1,500,000 shares of stock at market price. How much cash will it take to perform this buyback?
Using the same information as Question #4, if SOFI performs the buyback, what should the new market share price be assuming the total value of the company hasn't changed? Round answer to…
Chapter 15 Solutions
BUS 225 DAYONE LL
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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