EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 7, Problem 14P
Summary Introduction
To determine: The amount of underwriting spread from stock offering.
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Thousand Islands Resorts has 1,750,000 shares of authorized common stock, each having a $1 par value. Over the years, it has issued 1,532,000 shares, but currently 63,000 are held as treasury stock. The additional paid-in capital of the company is presently $5,314,000.
A. How many shares are now outstanding?Format: 1,111,111
B..If the company were able to sell stock at $19 per share, what is the maximum amount it could raise under its existing authorization, including treasury shares.Format: 1,111,111
C.What would be its common stock after the financing?Format: 1,111,111
D.What would be its additional paid-in capital accounts after the financing?Format: 11,111,111
An IPO was offered to the public at $18 a share with the issuing firm receiving $16.50 of that amount. The issuer incurred $850,000 in legal and administrative costs. At the end of the first trading day, the stock was priced at $22.40 a share. What was the total dollar cost, including both direct and indirect costs, of issuing the securities if 225,000 shares were offered?
Penne Pharmaceuticals sold 8 million shares of its $1 par common stock to provide funds for research and development. If the issue price is $12 per share, what is the journal entry to record the sale of the shares?
Chapter 7 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 7 - Prob. 1QTDCh. 7 - Prob. 2QTDCh. 7 - Prob. 3QTDCh. 7 - Prob. 4QTDCh. 7 - Prob. 5QTDCh. 7 - Prob. 6QTDCh. 7 - Prob. 7QTDCh. 7 - Prob. 8QTDCh. 7 - Prob. 9QTDCh. 7 - Prob. 10QTD
Ch. 7 - Prob. 11QTDCh. 7 - Prob. 12QTDCh. 7 - Prob. 13QTDCh. 7 - Prob. 14QTDCh. 7 - Prob. 15QTDCh. 7 - Prob. 16QTDCh. 7 - Prob. 17QTDCh. 7 - Prob. 18QTDCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29P
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- Tiktok Company issued 10,000 shares of its P5 Par value common stock having market value of P25 per share and 15,000 shares of its P15 par value preferred stock having a market value of P20 per share for a lump sum of P480,000. How much of the proceeds would be allocated to the common stock?arrow_forwardHi, If a company has 32,000 common stock shares outstanding $10 par value, then purchases 2,300 shares of treasury stock at $25 per share. How would this be jouralized? Also, after those transaction the same company declared a $0.10 per share cash dividend on the common stock outstanding. How would this be jouralized?arrow_forwardSunstrand Incorporated has 190 million shares of common stock priced at $116, 13 million shares of preferred stock priced at $50 and 18 million bonds priced at $1075. What is the weight of common stock in Sunstrand's capital structure?arrow_forward
- On January 20, Metropolitan Inc., sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $40.25 per share. Of the 8 million shares sold, 5 million shares were primary shares being sold by the company, and the remaining 3 million shares were being sold by the venture capital investors. Assume the underwriter charges 5.1% of the gross proceeds as an underwriting fee. a. How much money did Metropolitan raise? b. How much money did the venture capitalists receive? c. If the stock price dropped 3.4% on the announcement of the SEO and the new shares were sold at that price, how much money would Metropolitan receive?arrow_forwardAngina Inc. has 5 million shares outstanding. The firm is considering issuing an additional 1 million shares. After selling these shares at $20 per share offering price and netting 95% of the sale proceeds, the firm is obligated by an earlier agreement to sell an additional 251,000 shares at 90% of the offering price. In total, how much cash will the firm net from these stock sales?arrow_forward
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