Bankers one time net cost inclusive of all the fees

Assignment Help Financial Management

Reference no: EM131993244

A new enterprise after struggling for a few years has finally become a viable candidate for an IPO. The investment bankers with the aid of the management forecast net earnings after taxes (net income) of $30,000, $40,000, 50,000, and $60,000 for each of the next four years. Depreciation is estimated to be $3,000, $3,500, $4,000, and $4,500 in each of the next four years. The tax rate is 35%. The firms in the industry were compiled and those closest to the firm were isolated and their average beta of 1.5 was considered as the best estimate for the firm. The risk-free rate is 4% and the return on market averages 12%. The bankers after considerable thought decided on an annual rate of 5% beyond year 4. The bankers one time net cost inclusive of all the fees and concessions is estimated to be around 5% of the value of the firm.

How many shares will be issued if the bankers set the price at $10 per share?

Reference no: EM131993244

Questions Cloud

Dealt with in ancient greco-roman myths : How are matriarchy and patriarchy dealt with in ancient Greco-Roman myths?

The value of the short position : You are bearish on Telecom and decide to sell short 150 shares at the current market rate of $65 per share.

Consideration by all scholarship programs : In the box below, briefly explain your reasons for submitting this application. Discuss each of the following topics:

Explore the web page of an organization : For this week's post, please identify and explore the web page of an organization that is 'working on' the issue or connected to the community.

Bankers one time net cost inclusive of all the fees : The bankers one time net cost inclusive of all the fees and concessions is estimated to be around 5% of the value of the firm.

Write your response by giving a chronological account : Write your response by giving a chronological account (time based) of your reactions, referencing the specific time segments that I list below.

Determine what affect a sales volume increase : Determine what affect a sales volume increase or decrease will have on unit fixed cost, unit variable cost, total fixed cost, and total variable cost

Performing abortions as part of a medical practice : How would you discuss abortion with a non-Christian who is involved in performing abortions as part of a medical practice?

Calculate firm after tax profit if the economy is strong : Calculate Firm A's after tax profit if the economy is strong.

User Account

All Pages