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Howett Pockett, Inc., plans to issue 10.5 million new shares of its stock. In discussions with its investment bank, Howett Pocket learns that the bankers recommend a net proceed of $34.80 per share and they will charge an underwriter’s spread of 6.5 percent of the gross proceeds. In addition, Howett Pockett must pay $3.9 million in legal and other administrative expenses for the seasoned stock offering. Calculate the gross proceeds per share. (Round your answer to 2 decimal places.) Gross proceeds $ per share Calculate the total funds received by Howett Pockett from the sale of the 10.5 million shares of stock. (Enter your answer in millions of dollars rounded to 3 decimal places.) Funds received by Howett Pockett $ m
Suppose we have a society where there are three voting blocks of equal size: low, middle, and high income.
What is the expected rate of return on a portfolio Which consists of $9,000 invested in an S&P 500 Index fund, $32,500 in a technology fund, and $8,500 in Treasury Bills. The expected rate of return is 11% on the S&P Index fund, 14% on the technology..
Cerner’s stock has a required return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00*(1.3)4 = $2.8561. After t = 4, the di..
What is the company's cost of common equity if all of its equity comes from retained earnings? What would the cost of equity from new stock be?
The price of Corporation stock is expected to be $68 in 5 years. Dividends are anticipated to increase at an annual rate of 20 percent from the most recent dividend of $2.00. If your required rate of return is 16 percent, how much are you willing to ..
The Heuser Company's currently outstanding bonds have a 9% coupon and a 13% yield to maturity. what is Heuser's after-tax cost of debt?
Last year Kruse Corp had $420,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total d..
Write out the Security Market Line (SML), and explain each term.
Bond J has a coupon rate of 4.8 percent. Bond S has a coupon rate of 14.8 percent. Both bonds have eleven years to maturity, make semiannual payments, and have a YTM of 10.6 percent. Requirement 1: If interest rates suddenly rise by 2 percent, what i..
A large cow barn will cost $150,000 to build today and you figure it will add $18,000 per year to your after-tax cash flows for the next ten years. If the salvage value of the building is 50% after ten years and the cost of capital is 7%, what is the..
A stock has a price of $31 and an annual return volatility of 59 percent. The risk-free rate is 3.03 percent. Calculate the call and put option prices with a strike price of $29 and a 90-day expiration. Calculate the deltas of the call and put
The payback period is not concerned with
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