EBK CORPORATE FINANCE
4th Edition
ISBN: 9780134202778
Author: DeMarzo
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Question
Chapter 23, Problem 16P
a.
Summary Introduction
To determine: The expected total amount that a firm raised from the IPO.
Introduction: When a company sells its share publically in an open market for the first time, it is known as initial public offering (IPO).
b.
Summary Introduction
To determine: The market value of the firm after the IPO.
c.
Summary Introduction
To determine: The share price as per given case.
d.
Summary Introduction
To determine: The total cost to the firm’s original investors due to market imperfections from the IPO.
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Students have asked these similar questions
Please use Excel to solve: You have just purchased a share of stock for $20. The company is expected to pay a dividend of $0.50 per share in exactly one year. If you want to earn a 10% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend?
You have started a company and are in luck-a venture capitalist has offered to invest. You own 100% of the company with 5.39 million shares. The VC offers $1.06 million for 850,000 new shares.
a. What is the implied price per share?
b. What is the post-money valuation?
c. What fraction of the firm will you own after the investment?
a. What is the implied price per share?
The implied price per share will be $ per share. (Round to the nearest cent.)
b. What is the post-money valuation?
The post-money valuation will be $
c. What fraction of the firm will you
Your fractional ownership will be
million. (Round to two decimal places.)
own after the investment?
%. (Round to one decimal place.)
You have started a company and are in
luck—a
venture capitalist has offered to invest. You own
100%
of the company with
4.96
million shares. The VC offers
$1.12
million for
820,000
new shares.
a. What is the implied price per share?
b. What is the post-money valuation?
c. What fraction of the firm will you own after the investment?
Chapter 23 Solutions
EBK CORPORATE FINANCE
Ch. 23.1 - Prob. 1CCCh. 23.1 - Prob. 2CCCh. 23.2 - Prob. 1CCCh. 23.2 - Prob. 2CCCh. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CCCh. 23.4 - Prob. 1CCCh. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1PCh. 23 - What are the advantages and the disadvantages to a...
Ch. 23 - Prob. 3PCh. 23 - Suppose venture capital firm GSB partners raised...Ch. 23 - Prob. 5PCh. 23 - Prob. 6PCh. 23 - Prob. 7PCh. 23 - Prob. 8PCh. 23 - Prob. 9PCh. 23 - Prob. 10PCh. 23 - Prob. 11PCh. 23 - Prob. 12PCh. 23 - What is IPO underpricing? If you decide to try to...Ch. 23 - Prob. 14PCh. 23 - Prob. 15PCh. 23 - Prob. 16PCh. 23 - Prob. 17PCh. 23 - Prob. 18PCh. 23 - Prob. 19PCh. 23 - Prob. 20P
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