Appraise the shares of the modern physics corporation

Assignment Help Financial Management
Reference no: EM131869728

The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D1) at the end of the current year will be $1.70. The growth rate (g) is 10 percent and the discount rate (Ke) is 13 percent.

a. What should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.)

b. If there is a 3 percent total underwriting spread on the stock, how much will the issuing corporation receive? (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. If the issuing corporation requires a net price of $55.17 (proceeds to the corporation) and there is a 3 percent underwriting spread, what should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.)

Reference no: EM131869728

Questions Cloud

Which alternative has the larger percentage of spread : Which alternative has the larger percentage of spread? Is this the normal relationship between the two types of issues?
Considering new three-year expansion project : Sextet Corporation is considering a new three-year expansion project that requires an initial fixed asset investment of $2.94 million.
Monthly homeowner insurance : Jim has an annual income of $185,000. Jim is looking to buy a house with monthly property taxes of $140 and monthly homeowner’s insurance of $70.
Allow jim to spend on monthly mortgage : what is the most they will allow Jim to spend on a monthly mortgage?
Appraise the shares of the modern physics corporation : The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation.
Determine the effective annual interest rate for the loan : Determine the effective annual interest rate for the loan with points and other closing costs added to it.
Prepare kohl journal entries for the initial transaction : Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the collection of $66,150 at maturity.
Option to purchase-rent single-family residential property : You are considering an option to purchase or rent a single-family residential property in Cincinnati, OH. The loan can be prepaid at any time with no penalty.
What is bond current market price : Madsen Motors's bonds have 11 years remaining to maturity. What is the bond's current market price?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd